Top 6 Public Sector Bank After Merging – It is the most trending news currently from the banking and financial space.Every day a lot are being flash on various news channel or newspaper about proposed merging of smaller NPA ridden public sector bank with their larger counterpart. Recently Gyan sangam was held where the center of discussion was purely based on the merging of public sector bank with each other.
Why do government wants to merge various Public Sector Banks with each other or consolidate the number ?
Recently Finance Minister said “strong banks rather than numerically large numbers”. Mergers will helps Indian Public Sector Banks to compete with their global peers. Government saying that the largest bank of Indian subcontinent State Bank of India (SBI) doesn’t appear in the list of top 50 banks in the global ranking.
Mr Arun Jaitley stated “We need few good and large bank to compete with the world largest bank and for this good large banks to merge with each other and this has to happen,”
Government has created a panel to look after the merging of Public Sector Bank. The panel will closely work with the Banks Board Bureau (BBB) to identify the right matches for consolidation. The BBB is set to be put in place by April 1, 2016
Various Bank Union opposing the move of Government with their own reason. Their counter points are also valid as they said that
- if Government wants to keep the less number of banks, why did it issue licences to companies to set up payments and small finance banks ? Recently new license had been given to various private players to open the payment bank. IDFC and Bandhan bank were given licence to operate as large private sector bank.
- Various trade union are amaze with the reason provided by government i.e. If the main problem that public sector banks is facing today is that of rising non-performing assets, how will this get resolved by merging banks?
- How does government financial Inclusion program will be successful after consolidating the Banks
- What about the cultural affinity of the various bank. There are many banks which customers preferred because of cultural affinity
- Sometimes big are not good after seeing the financial crisis of some largest bank in the world like lehman brothers etc.
- What about the career path and growth of the employees of merging entities ?
- What about the Identity of the Merging bank,whether new name will be given after merging or the largest entity will have their own name ?
Anyway the assumption are made and preview of proposed larger entities are projected for merging. The various parameter are considered keeping the various key parameter like Assets, Profit, NET NPA etc.
The list of Major Six Banks would be :
(All figures in Crores)