Bank Merger Update: Big news for bank customers. The government is preparing to merge two large public sector banks. This decision is being taken to strengthen the banks and increase their efficiency. The government is preparing to merge Union Bank of India and Bank of India. People familiar with the matter have stated that the government is working on this proposal. If this merger occurs, it will become the second largest public sector bank in the country after State Bank of India (SBI).

Previously, several media reports had revealed that the Finance Ministry was considering options for merging two Chennai-based public sector banks—Indian Overseas Bank and Indian Bank. Additionally, plans are underway for Punjab & Sind Bank and Bank of Maharashtra. These banks have lower assets than other large public sector banks, so the government may consider them for privatization in the future.

Between 2017 and 2020, the government merged 10 public sector banks into four large ones. Consequently, the number of public sector banks decreased from 27 in 2017 to 12. If the government’s plan to merge Union Bank of India and Bank of India is implemented, the new bank formed by the merger of the two banks will become the second largest public sector bank in the country with assets worth around Rs 25.67 lakh crore.

This will surpass Bank of Baroda, which has assets of Rs 18.62 lakh crore. Currently, the country’s largest public sector bank is State Bank of India (SBI). This will increase competition in the banking sector and provide better service to customers. Previously, major mergers took place in 2019-2020, such as the merger of Andhra Bank and Corporation Bank with Union Bank, which strengthened the banks. This new step is in the same direction.

While this is still a matter of discussion, no official announcement has been made. If it happens, it will create history in the banking world. Merging smaller banks with larger ones will reduce overlap, save costs, and increase profits.