Skip to main content

Will Merger Of Banks Provide Any Benefit To India’s Economy





The season of bank mergers is going on and looking at the trend; this term surely fits the bill. The finance ministry of India is on a bank merger spree. It is amalgamating several small and mid-size banks into one major bank. According to this plan, the number of public sector banks that were 27 in numbers will be reduced to 12 after the merger process is complete. The current plan includes four major mergers of banks of the public sector undertaking.

The Oriental Bank of Commerce (OBC) and the United Bank of India (UBI) will be merged into the Punjab National Bank (PNB). After this move, Punjab National Bank will become the second-largest PSU bank right after the State Bank of India.  In the second amalgamation plan, Syndicate bank will become a part of Canara bank, whereas Andhra Bank and Corporation Bank shall be merged with Union Bank of India.

Allahabad Bank shall be merged with Indian bank which will make it the seventh-largest state-owned bank in India. However, the other six PSU banks such as Bank Of Maharashtra, Punjab And Sind Bank, UCO Bank, Indian Overseas Bank, Bank Of India And Central Bank remains untouched and will continue to function as separate entities.

In explanation of downsizing the number of banks to 12, the finance ministry stated that this step was initiated with the motto of making them global sized banks and this merger will help in consolidating strong national presence and global reach of these banks. The merger of these banks just came a few months after the current NDA government announced the merger of Vijaya Bank and Dena Bank with Bank of Baroda. It was effective from April 1st, 2019.

The amalgamation or merger process is not a new one as earlier five associate banks of State Bank of India were merged into one. It included State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore and State Bank of Hyderabad and also Bharatiya Mahila Bank.

The finance ministry states that after completion of this process, it is expected the profitability of the public sector banks shall improve and the total gross non-performing assets (NPA) of the PSU banks will come down. As for government and RBI, it will be easy to maintain and track the performance of these twelve banks rather than keeping an eye on every small bank that was scattered earlier. It will also merge the liquid asset of each bank, and the combination of it will give strength to the fiscal reserve of each bank. The move is also seen as a move to cope with the ongoing economic slump of the country and to accumulate the liquid strength in one institution rather than dividing them in several.

The customers of these banks will also experience the changes of these implications, but there is no need to panic about it. There will be no significant changes for the account holders of the bank immediately. But after some time you need to check with the integration system as your account number may be subject to change along with IFSC number and branch code. There might be a need of doing a KYC again after the merger process is complete as the mother bank will need complete data of customers of the bank which as merged into it. Therefore, you need to ensure that your current mobile number and email ID is up to date on the bank’s system. The shifts caused by these mergers anticipate better money management and restriction of bank frauds. As the database remains accumulated in one place, managing the function of the banks becomes much easier.     

Visit For  More Info:- https://www.eresearchnmarkets.com/
                                
                    

Comments

Post a Comment

Popular posts from this blog

How To Start A Bakery Business In India

The demand for baked items has increased steadily in the last couple of years. There are plenty of baked items that are purchased regularly by people, which include bread, biscuits, cakes, and confectionery products. Thus, the bakery business is also having good potential for growth and can give you considerable profit if done in the right way. However, running a bakery needs a hard set skill set too. Apart from the conventional bakery items, you can even invent something of your own that you can sell at your shop. The bakery business is no less different than restaurants, cafes, and juice bars. If you also intend to open a bakery business, there are few things that you need to know for starting the business and operate it successfully. Here are the factors that you have to consider while starting and running a bakery business. Location of the shop In all businesses, the location of your establishment matters a lot as it decides its success and failure. When you are starting a bakery b...
Post a Comment
Read more

How An Electric Car Works

We all have been reading and discussing about electric cars and buses and seen how they help in curbing pollution and save the environment. All over the world, the production of electric cars is receiving a good push, and companies are promoting their EV models for the future generation. We all do know how combustion engine car runs on fuel like diesel and petrol. But have you ever wondered how an electric car or bus functions? The general idea what we all have is that they run battery-powered motor which needs to be charged. But there is a lot of mechanism behind it which ultimately makes the EV run on the road. Here is a little short description for the non-technical people out there who are interested to know how electric cars or other vehicles work. We shall give you an anatomy of the electric car and tell you about its vital components like batteries, electric motor, regenerative brakes, and charging system. Batteries The battery is the bloodstream of the ...
Post a Comment
Read more

How Scary Is The Unemployment Rate Of India

Earning a living is the most essential for the people to survive. It applies to every person whether he or she is rich or poor. The source of income shall determine the ways of fulfilling the individual needs and the requirements of the family. A job or business is the means of income all around the globe. Everyone has their own preferences for ways to earn a living. But when this means is in scarcity, this can be alarming for the people of that region. Unfortunately, the data showing the employment opportunities graph in India is not encouraging and is a matter of big concern. The unemployment rate in India is significantly increased according to the data released Centre for Monitoring Indian Economy (CMIE). The report states that the unemployment rate has risen by 7.2 % until February 2019, which is the highest ever since September 2016. There has been a spike in the number of job seekers from different fields and also the lab...
Post a Comment
Read more