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List of Merged Public Sector Banks in India

Bank merger in India was an initiative to redefine banking. The main objective was to create global-sized banks to improve operational efficiency and widen the reach across the country by increasing the branch network. One of the objectives of a bank merger was to control the inclusion of Non-performing Assets.

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Bank Merger in India

The focus on the economy, profitability and cost-effectiveness is what brought in the bank merger in India. The growing competition among the key players in the same industry had a great impact on the economy and profitability. One other goal was to reduce and avert financial distress that arose out of bad loans. Restructuring of the banking industry with mergers was done for improving the performance both in terms of profitability as well as customer service.

Though the bank merger in India has proved to be good for the overall economy, we need to wait and watch the progress of the banking industry post-merger.

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List of the Merged Public Sector Banks in India 2022

Bank Merger is an agreement between the acquiring bank and the merged bank to combine their assets and liabilities and become a single entity. The merger resulted in 10 Public Sector Banks pooled into 4 Public Sector Banks. However, IOB, Bank of Maharashtra, Punjab and Sind Bank, Bank of India, Central Bank of India and UCO Bank, which are region-centric, will remain as independent entities.

The grand success of the merger of State Bank of India with five associate banks and Bharatiya Mahila Bank further encouraged the initiative of 10 PSBs merging into four. Five associate banks that merged with the State Bank of India, include the State Bank of Bikaner and Jaipur, the State Bank of Mysore, the State Bank of Travancore, the State Bank of Patiala and State Bank of Hyderabad. The merger has resulted in the State Bank of India becoming a part of the 50 banks in the world. 

By acquiring 3 to 4 branches under their umbrella, top PSUs like Punjab National Bank, Canara Bank, Bank of Baroda, Indian Bank and Union Bank of India have now become large entities with a vast network of branches. 

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Given below is the banks merging chart

Acquirer  BankMerged Bank
Canara BankSyndicate Bank
Punjab National Bank

Oriental Bank of Commerce

United Bank of India

Indian BankAllahabad Bank
Union Bank of India

Andhra Bank

Corporation Bank

Bank of Baroda

Vijaya Bank

Dena Bank

State Bank of India

State Bank of Travancore

State Bank of Hyderabad

State Bank of Bikaner and Jaipur

State Bank of Patiala

State Bank of Mysore

Bharatiya Mahila Bank

Punjab National Bank became the 2nd largest PSU after State Bank of India. Currently, there are 12 PSUs out of 27 earlier, including Bank of Baroda and State Bank of India. State Bank of India merger with its Associate Banks and Bharatiya Mahila Bank was in the year 2017, and the merger of Bank of Baroda, Vijaya Bank and Dena Bank was in the year 2019.

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What will be the status of the customers of the merged banks?

Branches of the merged banks will work as branches of the acquirer bank. For example, Syndicate Bank branches will now be Canara Bank branches. So customers of merged banks will be treated as customers of the acquirer bank. All the policies and guidelines of Canara Bank will be applicable to customers of Syndicate Bank.

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What is the impact of the merger of Public Sector Banks?

Besides the increase in the volume of assets and liabilities and widening of the network, there are several other merits as well as demerits of bank merger in India.

Merits of Bank Merger

The following are the merits of a Bank Merger in India:

  • Reduction in operational costs.
  • Increase in financial inclusion.
  • The range of banking operations in the country will increase as the services can reach the nook and corner of the country with the increase in the network.
  • Availability of technical expertise will improve, and there will be reduced scope of inefficiency, which was happening in small branches all this while.
  • Wage disparity will be eliminated.
  •  The need for infusion of funds by the Government to improve capital in PSUs time and gain will reduce.
  • Removal of unnecessary posts, as well as designation, will reduce administrative expenses.
  • The product range will improve and will give the customers a wider choice.

Demerits of Bank Merger in India

Though the merits of a Bank Merger are larger in the count, the demerits cannot be ruled out. The following are the demerits of Bank Merger in India:

  • Most of the banks are region-centric, and mergers will defeat the purpose of decentralisation.
  • The larger banks are impacted greatly by the global economic crisis, while the smaller banks can escape the impact.
  • The larger banks will have greater pressure on performance because of the increased NPA volume owing to the pooling of NPA of weaker banks.
  • Bad loans and bad governance are inherent issues, and the larger banks cannot get away from them by virtue of mergers.
  • Face staff issues due to changes in the mode of working and the internal guidelines.

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List of Merged Public Sector Banks in India FAQs

How many Public Sector Banks are there, after the merger?

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There are 12 Public Sector Banks after the merger. Earlier the number of Public Sector Banks was 27.

Which are the merged banks, and which are the Independent Banks?

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The merged banks are Canara Bank, Punjab National Bank, Bank of Baroda, India Bank, Union Bank of India, and State Bank of India. 

Some of the banks that were region-centric remained as independent entities. They are the Central Bank of India, UCO Bank, Bank of Maharashtra, Punjab and Sind Bank and Indian Overseas Bank.

Which are associate banks that were merged with the State Bank of India?

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The associate banks that merged with State Bank of India were State Bank of Travancore, State Bank of Hyderabad, State Bank of Mysore, State Bank of Bikaner and Jaipur, State Bank of Patiala and Bharatiya Mahila Bank.

Indian Bank merged with which Bank?

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Indian Bank merged with Allahabad Bank, where the acquiring bank is Indian Bank.

What was the main objective of a Bank Merger in India?

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The main objectives of bank merger in India were to improve the overall economy, improve profitability, reduce the volume of NPAs, improve efficiency and widen the global reach with an increased branch network.

Is Bank Merger good?

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Bank merger has their own benefits. 

  • There will be a positive impact on the overall economy. 
  • Competition among the players in the same industry will reduce, resulting in increased profitability. 
  •  Customers will have a wider range of products and services to choose from. The geographical reach will widen owing to the increase in the number of branches. 
  • Technical efficiency will improve.
  • Reduction in operational costs.
  • Removal of unnecessary posts and designations will result in lower operational costs.