Cabinet approves Mega Consolidation in Public
Sector Banks {PSBs} with effect from 1.4.2020
The Union Cabinet, chaired by the Prime Minister, Shri Narendra
Modi has approved the mega consolidation of ten PSBs into four which include
the –
(a) Amalgamation of Oriental Bank of Commerce and United
Bank of India into Punjab National Bank
(b) Amalgamation of Syndicate Bank into Canara Bank
(c) Amalgamation of Andhra Bank and Corporation Bank into
Union Bank of India
(d) Amalgamation of Allahabad Bank into Indian Bank
The amalgamation would be effective from 1.4.2020 and would
result in creation of seven large PSBs with scale and national reach with each
amalgamated entity having a business of over Rupees Eight lakh crore. The Mega
consolidation would help create banks with scale comparable to global banks and
capable of competing effectively in India and globally. Greater scale and
synergy through consolidation would lead to cost benefits which should enable
the PSBs enhance their competitiveness and positively impact the Indian banking
system.
In addition, consolidation would also provide impetus to amalgamated entities by increasing their ability to support larger ticket-size lending and have competitive operations by virtue of greater financial capacity. The adoption of best practices across amalgamating entities would enable the banks improve their cost efficiency and risk management, and also boost the goal of financial inclusion through wider reach.
Further, with the adoption of technologies across the amalgamating banks, access to a wider talent pool, and a larger database, PSBs would be in a position to gain competitive advantage by leveraging analytics in a rapidly digitalising banking landscape.
Source :PIB
In addition, consolidation would also provide impetus to amalgamated entities by increasing their ability to support larger ticket-size lending and have competitive operations by virtue of greater financial capacity. The adoption of best practices across amalgamating entities would enable the banks improve their cost efficiency and risk management, and also boost the goal of financial inclusion through wider reach.
Further, with the adoption of technologies across the amalgamating banks, access to a wider talent pool, and a larger database, PSBs would be in a position to gain competitive advantage by leveraging analytics in a rapidly digitalising banking landscape.
Source :PIB
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