New Delhi: In the backdrop of a nationwide lockdown to curb Coronavirus spread, the government's PSU bank merger plan that merged a total of 10 banks to form four mega lenders took effect on Wednesday. Hailing the biggest consolidation exercise in India's public banking sector, the Ministry of Finance said that the amalgamation will mark a new dawn for the Indian banking sector. "PSBs' amalgamation today will mark a new dawn for #IndianBanking. Bigger & stronger PSBs to offer faster loan processing, banking @ home, need-driven credit & specialized products for customers," the Department of Financial Services said in a tweet.

The PSU bank merger creates four mega lenders

According to the plan announced by the government in August 2019, the PSU bank merger has combined 10 PSU banks to form four entities. Oriental Bank of Commerce and United Bank have merged with Punjab National Bank to create a single lender managing businesses worth Rs 17.95 lakh crore. Similarly, Syndicate Bank stands merged with Canara Bank, Andhra Bank and Corporation Bank with Union Bank of India, and Allahabad Bank with Indian Bank. The merger is part of the government's plan to make India a $5-trillion economy by 2025.

PNB MD: Bigger footprint will help us serve customers more effectively

Commenting on the plan that took effect on Wednesday, PNB Managing Director SS Mallikarjuna Rao said, "The bigger geographical footprint will help us serve our customers more effectively and efficiently." The four mega lenders — PNB, Canara Bank, Union Bank and Indian Bank — have postponed some part of the implementation process because of the Coronavirus lockdown. From 27 PSU banks in 2017, India now has 12. After the amalgamation, the country now has seven large public sector banks and five small ones. In 2019, the government had merged Vijaya Bank and Dena Bank with Bank of Baroda. And prior to this, it had merged five associate banks of SBI and Bharatiya Mahila Bank with the public sector lender.

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