In the 2000s and 2010s, several bank mergers took place in India. These mergers were carried out mainly to strengthen banks, improve efficiency, and create larger public sector banks that could compete globally.
ICICI Bank Merger
In 2002, ICICI Bank merged with its parent company ICICI Limited and some of its subsidiaries. This merger helped ICICI Bank become one of the largest private sector banks in India.
State Bank of India (SBI) Mergers
The State Bank of India (SBI) also carried out several mergers with its associate banks.
- In 2008, SBI merged State Bank of Saurashtra with itself.
- In 2010, State Bank of Indore was merged with SBI.
Later, the government approved a major merger plan. On 15 June 2016, the Union Cabinet gave approval for merging five associate banks of SBI and Bharatiya Mahila Bank with SBI. The SBI board had already approved the proposal on 17 May 2016.
The Union Cabinet gave final approval on 15 February 2017, and the merger came into effect on 1 April 2017.
Banks Merged with SBI in 2017
- State Bank of Bikaner and Jaipur
- State Bank of Hyderabad
- State Bank of Mysore
- State Bank of Patiala
- State Bank of Travancore
- Bharatiya Mahila Bank
After this merger, SBI became the largest bank in India.
Bank of Baroda Merger
On 17 September 2018, the Government of India proposed merging Dena Bank and Vijaya Bank with Bank of Baroda.
The Union Cabinet and the boards of the three banks approved the merger on 2 January 2019. The merger officially came into effect on 1 April 2019.
Under the merger terms:
- Dena Bank shareholders received 110 shares of Bank of Baroda for every 1,000 shares they held.
- Vijaya Bank shareholders received 402 shares of Bank of Baroda for every 1,000 shares they held.
Punjab National Bank (PNB) Merger
On 30 August 2019, the Finance Minister announced the merger of Oriental Bank of Commerce and United Bank of India with Punjab National Bank (PNB).
The Union Cabinet approved the merger on 4 March 2020, and it came into effect on 1 April 2020.
After the merger:
- PNB became the second-largest public sector bank in India after SBI.
- The bank had assets of about ₹17.95 lakh crore and 11,437 branches.
Canara Bank Merger
On 30 August 2019, it was announced that Syndicate Bank would merge with Canara Bank.
The Union Cabinet approved the merger on 4 March 2020, and it became effective on 1 April 2020.
After the merger:
- Canara Bank became the fourth-largest public sector bank in India.
- The merged bank had assets of around ₹15.20 lakh crore and 10,324 branches.
Union Bank of India Merger
On 30 August 2019, the government announced that Andhra Bank and Corporation Bank would merge with Union Bank of India.
The merger was approved by the Union Cabinet on 4 March 2020 and was completed on 1 April 2020.
After the merger:
- Union Bank of India became the fifth-largest public sector bank in India.
- The merged bank had assets of about ₹14.59 lakh crore and 9,609 branches.
Indian Bank Merger
The government also announced the merger of Allahabad Bank with Indian Bank on 30 August 2019.
The Union Cabinet approved the merger on 4 March 2020, and it came into effect on 1 April 2020.
After the merger:
- Indian Bank became the seventh-largest public sector bank in India.
- The merged entity had assets of about ₹8.08 lakh crore.
Conclusion
These mergers were part of the government’s plan to consolidate the banking sector and create stronger banks. By combining smaller banks into larger institutions, the government aimed to improve efficiency, financial strength, and global competitiveness of Indian banks.