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Government Hints Merging of Banks to Six

Central Government has hinted the proposed merging of Public sector banks from existing 27 to consolidated six.

Banks Board Bureau (BBB) chief Vinod Rai, in recent meeting with top media houses has hinted the start of proposed merging and told that government stood ready to inject fresh funds beyond the $3.7 billion earmarked in the 2016/17 budget.

Read : Proposed Top 6 Public Sector Bank After Merging

Further he also cleared that each banks should decide about the shifting of their NPA or  bad loans to their balance sheets, while weaker banks need fresh capital before a round of consolidation that would cut the number of state banks to no more than six from 27 now.

He also cleared confusion of proposed merging of various banks like Bank of India and UCO bank. Rai said that Bank of India , which is having the third largest public sector bank in term of assets – would not be considered a merger candidate until it was recapitalized.

Read : Centre to infuse Rs 5000 Crore in Public Sector Banks

UCO bank will not be merged with any of the big bank, although “re-energised” as a standalone institution as UCO Bank is having large presence in eastern India.

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