he merger of Bank can be called as a new trend in present NDA government. But this is the old trend which has been reintroduced. The bank of madras merged into the other two presidency banks in British India , the bank of Calcutta and the bank of Bombay were merged to form Imperial Bank of India which in turn became the state bank of India in 1955.
In 2018 the union cabinet under modi approved the merger of five banks along with The Bharatiya Mahila Bank with SBI . The five were the state bank of Bikaner, The State bank of Jaipur, the state bank of Hyderabad, the state bank of Mysore and the state bank of Patiala. The union cabinet also announced the merger of Vijaya bank and Dena bank with bank of Baroda on September 17, 2018 this became the third largest lender.
The merger of Bank helps the Banking sector in many ways . After the merger SBI became the largest lender . The net profit of State Bank of India rose to 838 crores and even the chairman of SBI Rajnish Kumar said that the NPA (non performing assets) are decreasing. And even SBI has recently taken 49%stake in yes bank it also has investment in subsidiaries like jio payments bank and branches in other countries like Mauritius, Indonesia and has operation in 35 countries .
The government on March 4 had notified the amalgamation schemes for 10 state owned banks into four as part of its consolidation plan to create bigger size stronger banks in public sector. This amalgamation will come into affect on April 1st 0f 2020.
As per scheme oriental Bank of commerce and united bank of India will be merged into Punjab national bank.Syndicate bank will be merged into Canara bank, Allahabad bank will be merged into Indian Bank, Andra bank and corporation bank will be merged into union bank of India.
The merger of Bank helps in reduction of the cost of operation and even helps in financial inclusion and helps in broadening the geographical reach of the banking operation NpA and risk management can also be properly managed. Merger also leads to availability of a bigger scale of expertise and helps in minimizing the scope of inefficiency which is more in small banks. Even merger will help RBI in the vision of better control and implementation of policies. Customer will have accessibility to more number of branches and ATMs.
Abhishek s Shisambrimath