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Here are 5 main points to apprehend about bank merger

Finance Minister Nirmala Sitharaman on Friday declared the amalgamation of 10 public sector banks into four entities to make them more effective and sustainable as well as improve their lending powers.

As per the Press Trust of India…

The finance minister also said banks will be given sufficient capital. Last week, she had declared that the Rs 70,000 crore capital strain for PSBs for the current monetary would be front-loaded.

“Employees will only benefit with the mergers,” he added.
Earlier this year, Dena Bank and Vijaya Bank were merged with Bank of Baroda. Prior to this, the government had merged five associate banks of SBI and Bharatiya Mahila Bank with the State Bank of India.

FM also said Public sector banks’ boards are allowed to hire chief risk officer at market-linked bonus to attract best possible talent.

The Canara Bank will merge Syndicate Bank; Union Bank of India, Andhra Bank and Corporation Bank will merge, and Indian bank will merge with Allahabad Bank. Mutually, they will operate market worth Rs. 55.8 lakh crore.
After the mega PSU bank merger, there will be 12 public sector banks in the system rather of 27, the Finance Minister said.
Declaring steps to allow the public sector banks, the Finance Minister said a board committee of nationalised banks will appraise the performance of general managers and higher positions.
The government further said PSU banks will be repositioned to take the economy to the $5-trillion mark, with wide-ranging reforms, financially more powerful and well-provisioned banks, technology-driven banking, synergy and more effective governance.
The Finance Minister also said that loan returns have hit a restoration level of Rs.1,21,076 crore. Gross non-performing assets (NPAs) – or bad loans – have become down from Rs. 8.65 lakh crore to Rs. 7.90 lakh crore.

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