PSU Banks Merger Big Update: IOB, UCO, BOI, BOM, Central Bank On Radar; When Is Next Phase Of PSB Merger?

The timeline and details of the next phase of the public sector bank merger are much awaited. However, the government has issued a new clarity during the Lok Sabha's winter session. The ministry said there are no immediate plans for a public sector bank merger. On the other hand, reports said that the government is likely to draw a blueprint for identifying banks for the next phase of the merger. The plan is to reduce state-run lenders to just four from the current 12 by FY27.

PSU Banks Merger: When Is Next Phase?

When asked on whether the state-run banks will be merged to form larger banks, the Minister of State for Finance Pankaj Chaudhary said, "Presently, no proposal on merger or consolidation of Public Sector Banks (PSBs) is under consideration of the Government." The reply was written to a question asked in the Lok Sabha.

On other hand, sources told MoneyControl, that the government is working on an ambitious public-sector bank (PSB) consolidation blueprint that could reduce the number of state-owned lenders from 12 to just four in FY27. These sources added, "The plan is to reduce the number of PSBs from the current 12 to four. Smaller banks will first be merged into the bigger ones, and then consolidated further to form large entities capable of supporting India's growth needs."

According to report, the four big banks would be State Bank of India, Punjab National Bank, Bank of Baroda and a merged Canara-Union Bank. This also means that these four banks would undertake the other smaller banks under their ambit.

Which Banks Are Not Merged Yet?

There are six banks that are currently in the PSU banking system as single entities. These are:

- Bank of India

- Indian Overseas Bank

- Central Bank of India

- Bank of Maharashtra

- UCO Bank

- Punjab & Sind Bank

List Of Big Banks Merger:

1. April 2017

SBI + State Bank of Bikaner And Jaipur + State Bank of Hyderabad + State Bank of Patiala + State Bank of Mysore + State Bank of Travancore + Bharatiya Mahila Bank

2. April 2019

Bank of Baroda + Vijaya Bank + DENA Bank

3. April 2020

Punjab National Bank + Oriental Bank of Commerce + United Bank of India

4. April 2020:

Canara Bank + Syndicate Bank

5. April 2020:

Union Bank of India + Andhra Bank + Corporation Bank

6. April 2020

Indian Bank + Allahabad Bank

What Does PSU Bank Merger Mean To Customers?

According to an earlier report of Bajaj Broking, once a PSU bank merger is finalised, both the anchor bank and its customers undergo significant changes. If you are a customer of any merged entity, it is important to understand what terms apply after the consolidation. Here are key factors to note:

1. Revised account numbers and IFSC codes

Customers often receive new account numbers and IFSC codes. You need to update these details in your salary mandates, ECS, and UPI settings to ensure smooth transactions.

2. Unified customer service and helpline

Post-merger, customer service is centralised. You can access banking services through a common portal or helpline, regardless of your original bank.

3. Merged mobile and internet banking platforms

All digital services are eventually moved to the anchor bank's platform. You may need to re-register or set up fresh login credentials.

4. Harmonised interest rates and charges

Interest rates on deposits and loans may change to align with the anchor bank's structure. You should monitor any changes to your account terms.

5. Branch and ATM network integration

The merger expands your branch and ATM access. While some branches may be rationalised, you generally gain access to a larger network.

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