Centre merges rural banks under PNB to push lending
New Delhi: A clutch of Regional Rural Banks (RRBs) are being amalgamated under PNB to give impetus to rural lending in Punjab and Bihar. This move is seen as part of the current NDA government's agenda to energize rural lending and strengthen RRBs.
Under the amalgamation scheme, Punjab Gramin Bank (PGB) will be amalgamated with Malwa Gramin Bank (MGB) and Sutluj Gramin Bank (SGB) of Punjab w.e.f, January 1st, 2019.
Meanwhile, a new entity called Dakshin Bihar Gramin Bank has been created under whichMadhya Bihar Gramin Bank and Bihar Gramin Bank will be merged.
While Madhya Bihar Gramin Bank was already sponsored by PNB, Bihar Gramin Bank was sponsored by UCO Bank. Now, all these merged entities will be sponsored by Punjab National Bank.
The idea behind the merger is to have a strong PSU bank as the sponsor for these banks so that not only can their capital adequacy be increased but also their expansion can be fast-tracked. The government has identified rural lending as one of the key focus areas to alleviate rural stress.
The,amalgamated Banks will remain under the sponsorship of Punjab National Bank, which will facilitate effective supervision, making it stronger than ever. The RRBsare expected to accelerate lending in their respective States besides taking care of the interest of its stakeholders.
The banks will continue to function normally and post-amalgamation there is no change in its functioning and daily activities. All the banking activities and lending activities remain uninterrupted across branches.