Banking mergers in India have played a crucial role in strengthening the financial sector by creating larger, more stable entities capable of competing on a global scale. A merger occurs when two or more banks combine to form a single, stronger entity. The Indian government has strategically implemented mergers, particularly among public sector banks (PSBs), to improve operational efficiency, reduce bad loans, and enhance customer services.
Mergers in the banking sector offer multiple benefits, including:
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In recent years, several major public sector bank mergers have taken place to consolidate the banking sector. Below is the latest Bank Merger List in India:
| Merged Bank (Anchor Bank) | Banks Merged | Effective Date |
| Bank of Baroda | Vijaya Bank, Dena Bank | April 1, 2019 |
| Punjab National Bank (PNB) | Oriental Bank of Commerce, United Bank of India | April 1, 2020 |
| Canara Bank | Syndicate Bank | April 1, 2020 |
| Union Bank of India | Andhra Bank, Corporation Bank | April 1, 2020 |
| Indian Bank | Allahabad Bank | April 1, 2020 |
These mergers have reduced the number of public sector banks from 27 in 2017 to 12 as of 2024.
After the PSU bank mergers, the authorities implemented certain terms and conditions.
Banking mergers introduced several facilities to improve customer experience:
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The merger of Punjab National Bank (PNB), Oriental Bank of Commerce (OBC), and United Bank of India created India’s second-largest public sector bank and fifth-largest banking entity overall. This merger significantly improved the bank’s lending capacity, asset quality, and operational efficiency.
Post-merger, banks have undergone major changes in operational and customer services:
Banking mergers in India are a significant step toward strengthening the financial sector, reducing risks, and improving customer services. By consolidating public sector banks, the government aims to create globally competitive entities that can drive economic growth. While these mergers bring numerous benefits, they also require careful execution to ensure a smooth transition for customers, employees, and stakeholders. With continued reforms and technological advancements, India’s banking sector is poised for greater stability and expansion.
A banking merger occurs when two or more banks combine into a single entity to improve financial stability and operational efficiency.
Mergers enhance capital strength, reduce non-performing assets, and create more competitive banking institutions.
Oriental Bank of Commerce and United Bank of India were merged with PNB in April 2020.
Customers retain their accounts, but branch codes, IFSC codes, and digital banking services may be updated.
Employees are absorbed into the merged entity with job security and revised roles as per the restructuring.
No, existing loans continue under the same terms and conditions post-merger.
The latest mergers took place in April 2020, consolidating 10 PSU banks into 4 larger entities.
Mergers lead to stronger banking institutions, increased lending, and enhanced financial inclusion, benefiting economic growth.
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