Cabinet Approval: Mega Consolidation of Public Sector Banks
On March 4, 2020, the Union Cabinet chaired by Narendra Modi had approved mega consolidation of 10 Public Sector Banks.
Highlights
The mega merger is to come into effect from April 1, 2020. It includes amalgamation of United Bank of India and Oriental Bank of India into Punjab National Bank. Also, amalgamation of Syndicate Bank into Canara Bank. The Cabinet also approved amalgamation of Corporation Bank and Andhra Bank into Union Bank of India. It also approved amalgamation of Allahabad Bank into Indian Bank
Benefits
The Amalgamation will help these under performing banks get cost benefits. Also, each amalgamated bank will hold business of 8 lakh crore rupees. This will help the banks compete with other banks in India and also globally. It will also increase competitive spirit of the banks boosting Indian Banking System.
How is Amalgamation different from Merger?
A Merger is where two or more business entities combine to form a new entity. On the other hand, in amalgamation one business entity acquires one or more business entities.
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Month: Current Affairs - March, 2020