Why Merger Of Banks Is Important?

The banks are combining at a faster rate and recently the government has announced the merger of 10 PSBs. But why banks merger is necessary? Because merger provides support to the small or regional banks which are facing a bad financial situation like high NPA ratio. Such as Bank Of Baroda is merged with Vijaya and Dena Bank that provides them a huge benefit, as of now Bank Of Baroda becomes the second-largest public sector banks in India. The aim of this amalgamation is to make the banks a strong global lender. Know more about the banks merging process in this article. 

Need of the bank merger

Merger of banks supports the small and regional banks to stabilize their financial status, and this can be done by consolidating with a large bank. The problems like lower Non-performing asset ratio can be managed easily because after the merger banks fund are combined together. The State Bank Of India merger with the associate banks and Bhartiya Mahila Bank is one of the most successful mergers.

Merger of banks increases the number of branches and ATMs for customers. They can also easily access their accounts with upgrading technology. Because after the merger the small bank customers also have the online services facility. Merger helps in managing the funds of the banks and makes them a Strong lender so that customers can easily borrow a high loan amount. 

Recent merger of banks

After the recent announcement of the finance minister Nirmala Sitharaman, the second PSBs merger is going to take place. The banks which are going to combine are as follows:

Andhra Bank with Union & Corporation Bank:

Union Bank Of India is a large public sector bank with large assets and has around 4,300 branches in India, it is merged with the small public sector banks like Andhra Bank and Corporation Bank. The merger would benefit the bank and provide with INR 14.6 lakh crore business and 9,609 branches in India.

Punjab National Bank With Oriental Bank Of Commerce and United Bank Of India:

The Punjab National Bank is a public sector bank that provides financial services it has 7001 branches in India. It combines with Oriental Bank and United Bank to provide support and increase their lending capacity. After the merger, it could have Rs.18 lakh crore business and 11,437 branches across India.

Canara Bank with Syndicate Bank:

The Canara bank is one of the reputed banks and after the merger with the Syndicate Bank, which is a small commercial bank It will profit with Rs. 15.2 lakh crore business with 10,342 branches across India.

Indian Bank With Allahabad Bank:

The Allahabad Bank & Indian Bank merger would provide various benefits to the customers as the branches and funds increases with the merger. The banks' CASA ratio will also increase after its merger. It make the banks a stronger lender to offer high loan amounts to the customers and many benefits to the existing loan customers and account holders.