PSB Amalgamations in the 2000s and 2010s

These strategic mergers in the 2000s and 2010s were pivotal in restructuring India’s public sector banking landscape, enhancing efficiency, and enabling banks to compete on a global scale. Through these amalgamations, the Indian government aimed to create stronger, more resilient financial institutions capable of handling the growing demands of the economy while improving their operational efficiency. The impact of these mergers continues to influence the banking sector’s growth, offering better services and facilitating financial inclusion.

SBI Merger (2008–2017)

  1. SBI and Associate Bank Mergers:
    • 2008: The State Bank of India (SBI) merged with its associate bank State Bank of Saurashtra.
    • 2010: State Bank of Indore was merged with SBI.
  2. Further Mergers (2016–2017):
    • In 2016, the Union Cabinet approved the merger of five remaining associate banks of SBI:
      • State Bank of Bikaner and Jaipur
      • State Bank of Hyderabad
      • State Bank of Mysore
      • State Bank of Patiala
      • State Bank of Travancore
    • Additionally, Bharatiya Mahila Bank was also included in the merger.
    • This move aimed at creating a stronger SBI with better financial health and larger reach.
    • The merger was approved by the Union Cabinet in February 2017, with the merger effective from 1 April 2017.
    • While the merger was initially expected to face challenges, including issues with pension liabilities and bad loans, it ultimately strengthened SBI’s position as India’s largest public sector bank.

Bank of Baroda (BOB) Merger (2018–2019)

  1. Proposed Merger with Dena Bank and Vijaya Bank:
    • On 17 September 2018, the Government of India proposed the amalgamation of Dena Bank and Vijaya Bank with Bank of Baroda (BoB), which was later approved by the respective boards and the Union Cabinet.
    • The merger became effective from 1 April 2019, creating a larger, more competitive Bank of Baroda.
  2. Shareholder Compensation:
    • Shareholders of Dena Bank received 110 equity shares of BoB for every 1,000 shares they held.
    • Shareholders of Vijaya Bank received 402 equity shares of BoB for every 1,000 shares they held.

Punjab National Bank (PNB) Merger (2019–2020)

  1. Merging with Oriental Bank of Commerce (OBC) and United Bank of India (UBI):
    • On 30 August 2019, the Finance Minister announced the merger of Oriental Bank of Commerce (OBC) and United Bank of India (UBI) with Punjab National Bank (PNB).
    • PNB became the second-largest public sector bank (PSB) in India with ₹17.95 lakh crore (US$220 billion) in assets and 11,437 branches.
  2. Merger Approval:
    • The Union Cabinet gave its approval on 4 March 2020, and the merger was officially completed on 1 April 2020.
    • Shareholders of OBC received 1,150 shares of PNB for every 1,000 shares they held, while UBI shareholders received 121 shares for every 1,000 shares they held.

Canara Bank Merger (2019–2020)

  1. Merging with Syndicate Bank:
    • On 30 August 2019, the Finance Minister announced the merger of Syndicate Bank with Canara Bank.
    • The merged entity became the fourth-largest PSB in India with ₹15.20 lakh crore (US$180 billion) in assets and 10,324 branches.
  2. Merger Process:
    • The Union Cabinet approved the merger on 4 March 2020, and the process was completed on 1 April 2020.
    • Shareholders of Syndicate Bank received 158 equity shares of Canara Bank for every 1,000 shares they held.

Union Bank of India (UBI) Merger (2019–2020)

  1. Merging with Andhra Bank and Corporation Bank:
    • On 30 August 2019, the Finance Minister announced that Andhra Bank and Corporation Bank would be merged with Union Bank of India.
    • This made Union Bank of India the fifth-largest PSB with ₹14.59 lakh crore (US$170 billion) in assets and 9,609 branches.
  2. Merger Completion:
    • The merger was approved by the Union Cabinet on 4 March 2020 and became effective on 1 April 2020.

Indian Bank Merger (2019–2020)

  1. Merging with Allahabad Bank:
    • On 30 August 2019, it was announced that Allahabad Bank would merge with Indian Bank.
    • This merger created the seventh-largest PSB in India, with ₹8.08 lakh crore (US$97 billion) in assets.
  2. Merger Process:
    • The Union Cabinet approved the merger on 4 March 2020, and the integration was completed on 1 April 2020.