Which bank recently submerged in sbi

Punjab and Sind Bank,. Bank of India,. Central Bank of India. T his is an important development for the stressed and ailing Banking Sector of the country. Union Finance Minister Nirmala Sitharaman on 30th August had announced the consolidation of state-owned banks PSBs in which 10 PSBs being merged to form 4 bigger lenders to strengthen the Banking sector struggling with a bad-loan.

The key factors for the mergers were: Technological platform , Customer reach , Cultural similarities , and Competitiveness , Finance Secretary Rajiv Kumar added. A key reason for the merger is the weight of mounting bad loans over the years. Ostensibly aimed at improving operating efficiency , governance and accountability and facilitate effective monitoring.

Creating globally stronger banks , doing away with needless overlaps in operations and infrastructure, and ushering in economies of scale to bring down costs have always been at the heart of any consolidation drive. The move was aimed at creating next-generation banks with a strong national presence and global outreach accompanied with enhanced capacity to increase credit to the various important sectors of the economy. Making Geographically Compatible Banks. The consolidation exercise will be accompanied by recapitalisation to the tune of Rs 55, crore out of Rs 70, crore budgeted for capital infusion in public sector lenders as also governance reforms.

The biggest chunk of recapitalisation will go to PNB, at Rs 16, crore, followed by Union Bank at Rs 11, crore — the two anchor banks for the merger.

As part of the governance reforms , Sitharaman said non-official directors at state-run lenders will have to function like independent directors on company boards. Boards will be peer-reviewed. The number of executive directors has been raised to four and boards have been given the mandate to reduce and rationalise board committees.

Public sector banks will also be able to appoint a chief risk offer at market rates. The decision to merge banks is a good remedial measure, but continued focus on corporate governance and adherence would be of prime importance. Among the four mergers, the combined entity of Allahabad Bank and Indian Bank will have the lowest net NPA non-performing assets , while boasting the highest provisioning coverage and strongest CASA current account and savings account franchise. The merged entity also has the least branch overlap.

However, this diversity in cultures may prove challenging during integration and may also lend no major cost benefits from the merger. In place of 27 public sector banks in , now there will be 12 public sector banks after the latest round of consolidation of PSU banks. The consolidation of public sector banks will give them scale, the finance minister said. Government effects Governance Reforms.

Boards empowered, Board committees strengthened, non-official directors enabled to play effective role, leadership pipeline initiated. No retrenchment has taken place post merger of Bank of Baroda, Dena Bank and Vijaya Bank; staff has been redeployed and best practices in each bank have been replicated in others. Post consolidation, boards will be given flexibility to introduce chief general manager level as per business needs. They will also recruit chief risk officer at market-linked compensation to attract best talent.

Never miss a story! Products Durables. Energy Power. Services Advertising. Rate Story. Font Size Abc Small. Abc Medium. Abc Large. ET Bureau. In gazette notifications published on Thursday, the government said the entire undertakings of these five banks shall stand transferred to and vested in State Bank of India. Under the lens NFRA member under lens for audit gaps in fraud-hit firm; cloud over selection process for regulatory posts.

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