SBI, PNB, BOI: The banking sector is expected to see significant changes in the coming days. The Modi government is once again preparing for a mega bank merger. Following NITI Aayog’s recommendation, the government is preparing to merge smaller public sector banks with larger ones. According to media reports, the government’s merger plan could involve combining four public sector banks into larger entities. Under this mega merger, the government could merge the Indian Overseas Bank, the Central Bank of India, the Bank of India, and the Bank of Maharashtra. Under this plan, the government is preparing to merge two central public sector banks, leaving only four large public sector banks in the country. These banks include Union Bank of India and Bank of India.
Union Bank of India currently has approximately 210 million account holders, while Bank of India currently has approximately 55 million customers. After the merger, this number will reach 255 million accounts, slightly less than SBI’s 260 million account holders. The government may merge smaller banks with larger public sector banks, such as State Bank of India, Punjab National Bank, and Bank of Baroda.
What is the government’s objective?
Over the past few years, the government has taken several significant steps to improve the banking sector, notably the 2019 mega merger. Punjab National Bank, Oriental Bank of Commerce, and United Bank of India were merged to form a single large bank. Under the current plan, the government aims to reduce the number of public sector banks and make them globally competitive. This will also bring uniformity to digital banking and financial services.
A draft of this proposal has been prepared as a ‘Record of Discussion’. It will now be sent to the Cabinet meeting and then to the Prime Minister’s Office. If approved, the mega bank merger will be completed in the financial year 2026-27.
1. Indian Overseas Bank 2. Central Bank of India 3. Bank of India 4. Bank of Maharashtra
How many banks will remain?
If the government’s merger plan is completed within the stipulated timeframe, the number of public sector banks in the country will decrease. Only four public sector banks will remain in the country. After the mega merger, India will be left with SBI, PNB, BoB, and Canara Bank.
