No proposal under consideration on merger of public sector banks, says MoS Finance

New Delhi: There is no proposal under consideration before the government on the merger or consolidation of public sector banks (PSBs) at present, Minister of State for Finance Pankaj Chaudhary said on Monday.

Chaudhary, in a written reply to the Lok Sabha, said the amalgamation of PSBs helped create stronger competitive banks with economies of scale and scope while enabling the realisation of wide-ranging synergies.

Leveraging networks, better access to low-cost deposits, increased ability to support larger ticket-size lending, and competitive operations by virtue of greater financial capacity have provided the amalgamated banks a substantial rise in customer base, market reach and operational efficiency, he added.

Synergy was also gained due to increased scope of operations and improvement in cost efficiency, with the adoption of best practices and digitisation, he said.

The amalgamation of PSBs, as envisaged, has contributed to improving operational efficiency and financial soundness of banks through streamlining of operations and reduction in costs, thereby resulting in increasing consolidated business of banks, the minister noted.

Quoting Reserve Bank of India data, he said the consolidated total business of Bank of Baroda (BoB), in which Vijaya Bank and Dena Bank were amalgamated with effect from April 1, 2019, grew from Rs 16.1 lakh crore in March 2019 to Rs 27.0 lakh crore in March 2025.

Punjab National Bank (PNB), in which Oriental Bank of Commerce and United Bank of India were amalgamated with effect from April 1, 2020, grew from Rs 18.3 lakh crore in March 2020 to Rs 26.8 lakh crore in March 2025.

The business of Union Bank of India (UBI), in which Andhra Bank and Corporation Bank were amalgamated with effect from April 1, 2020, grew from Rs 15.3 lakh crore in March 2020 to Rs 22.9 lakh crore in March 2025, while Canara Bank, in which Syndicate Bank was amalgamated with effect from April 1, 2020, expanded from Rs 15.7 lakh crore in March 2020 to Rs 25.3 lakh crore in March 2025, he said.

The total business of Indian Bank, in which Allahabad Bank was amalgamated with effect from April 1, 2020, increased from Rs 8.6 lakh crore in March 2020 to Rs 13.3 lakh crore in March 2025, Chaudhary

added.