Mega-Merger of 10 PSU Banks Can Be Delayed Beyond April 1st; PMO Asks Merger Benefits From PNB, Bank Of Baroda, Others
The mega merger of 10 PSU banks, which will reduce the number from 10 to just 4, can be delayed. As per fresh reports coming in, the deadline of April 1st can be extended, since there are a lot of regulatory processes, which are still incomplete.
Meanwhile, PMO has sought all the benefits which this merger will bring. As we reported last week, a high level meeting between the bank representatives and Finance Ministry has already happened, and in the next few weeks, more such meetings can take place.
Find out more about the merger of 10 PSU banks right here!
April 1st Deadline For Banks Merger Can Be Delayed
A senior, unnamed Public Sector Bank official has revealed that the deadline of April 1st for merging India’s 10 biggest PSU banks seems unrealistic as of now.
And the reason is that several steps which will lead to the eventual merger, is still pending.
Even after the Cabinet approves the merger, there has to be another major process: Scheme of Amalgamation needs to be tabled in the Parliament, and it should be discussed and debated for at least 30 days.
Now, since the Budget’s second session will start from March 2nd, this means that the Scheme of Amalgamation will be there is the Parliament till April 2nd, only if its tabled in the Parliament on March 2nd.
Besides, there are mandatory requirements such as fixation of share swap ratio, shareholders consent which needs to be finalized.
Hence, at least 30-45 more days will be required for the successful merger of the 10 PSU banks.
And this means that the April 1st deadline can be conveniently missed.
More details are awaited on this matter.
PMO Wants To Know The Benefits Of The Merger
Meanwhile, during the high level meeting between the PMO and Finance Ministry officials related with the merger of the banks, a new angle has emerged.
PMO wants to know the benefits which this mega merger will bring to the Govt, and the details will have to be shared by the bank officials, and the Finance Ministry.
PMO has asked the banks to provide in-depth details about NPAs, capital requirement, credit growth and cost savings related with the merger, and how it will benefit the Govt in the longer run. Besides, the banks have been asked to furnish financial projections for the next three years, based on the merger.
As per the merger plans, Punjab National Bank will merge with United Bank of India and Oriental Bank of Commerce; Syndicate Bank will merge with Canara Bank, and Allahabad Bank and Indian Bank will merge together.
Besides, the merger of Vijaya Bank and Dena Bank with Bank of Baroda is still incomplete, even after 10 months of approval.
It seems that the mergers won’t be so easy and smooth, after all.
We will keep you updated, as more details come in.