Speculations Rife Over Possible PSU Bank Mergers As 'Document' Circulates On X

A document circulating on X (formerly Twitter) has ignited speculation regarding potential mergers involving two pairs of Indian banks – Bank of India and Bank of Maharashtra, and Union Bank and UCO Bank.

As per reports by Livemint, a parliamentary panel is set to engage in discussions with these four government-owned banks early next year, focusing on banking laws that govern mergers and acquisitions.

The informal discussions are scheduled to take place with representatives from UCO Bank and Union Bank of India on 2 January 2024, followed by talks between Bank of Maharashtra and Bank of India on 6 January 2024, in Mumbai and Goa.

Meanwhile, finance ministry sources, as reported by the news agency, emphasised that the government is not currently considering any proposals to merge the public sector banks.

They characterised the discussions as part of a "routine exercise."

Titled "Study Visit Programme of the Committee on Subordinate Legislation, Lok Sabha to Mumbai and Goa from 2 to 6 January 2024," the document is addressed to key figures, including the governor of the Reserve Bank of India (RBI), chairpersons of LIC (Life Insurance Corporation), IRDAI (Insurance Regulatory and Development Authority of India), and NABARD, along with MD and CEOs of the four mentioned banks.

Furthermore, the document reaches out to CMDs of New India Assurance Company, United India Insurance Company, Oriental Insurance Company, National Insurance Company, and MD & CEO of SBI Life Insurance Company.

This development follows the government's earlier announcement in 2019 regarding the merger of 10 state-owned banks into four lenders.

Additionally, in March 2020, the government approved a "mega consolidation" of PSBs, involving mergers such as Oriental Bank of Commerce (OBC) and United Bank of India into Punjab National Bank, Syndicate Bank into Canara Bank, Andhra Bank, and Corporation Bank into Union Bank of India, and Allahabad Bank into Indian Bank.