Bank Merger Plans Revealed:- The central government is once again preparing to make significant changes in the banking sector. It is being reported that the government may merge six large public sector banks with each other or with a larger bank. This discussion has intensified because the government wants to create large banks in India that can rank among the top 100 banks in the world. India’s largest public sector bank, State Bank of India, has also supported this next phase of consolidation, aiming to increase market value, reduce NPAs, and strengthen digital capabilities. SBI aims to grow into larger banks in the future to increase its market value further. A decision on six PSU banks is currently pending, and discussions are ongoing.
Which banks will be merged?
The banks being discussed for merger include Bank of India, Indian Overseas Bank, Central Bank of India, Bank of Maharashtra, UCO Bank, and Punjab & Sind Bank. Some of these banks could be merged with each other or with a larger bank.
Several major bank mergers have taken place in India since 1993. The banking system has also seen significant changes over the past three decades. These mergers have increased banks’ capital capacity and facilitated the adoption of better technology.
In April 2017, SBI merged six of its associate banks. These banks included State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Patiala, State Bank of Mysore, State Bank of Travancore, and Bharatiya Mahila Bank. This made SBI the country’s largest public sector bank.
Although the Finance Ministry has not yet officially announced any names, a significant announcement is expected by April 2026. According to media reports, the government is preparing the next round of banking merger plans, and official details may be shared in April-May.
However, unlike previous large mergers, this time there will not be a single merger; instead, the plan may be implemented in two or three phases.
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 be reduced. Only four public sector banks will remain in the country. After this major merger, only SBI, PNB, BoB, and Canara Bank will stay in India.
Currently, there are 12 public sector banks in the country. The government can reduce the number of these banks to four. Except for the State Bank of India, Canara Bank, Punjab National Bank and Bank of Baroda, all other banks in the country can be merged. However, the number of banks that will remain in the country has not yet been officially announced.