26 PSU Banks, 3400 Bank Branches Closed, Merged In Last 5 Years; SBI #1 In Closing Branches Of Merged Banks
The rate at which banks and branches are being merged has risen considerably in recent years. The recent news of 10 biggest public sector banks being merged into four has kicked up quite the storm.
Reports have emerged that show that in the last five financial years, as much as 3400 branches of 26 PSBs have been shut down or merged. And all this is credited to the consolidation of exercise in the banking sector.
Find out more details right here!
RBI States: 3400 Branches of 26 PSBs Closed Or Merged In Last Five Financial Years
A query was filed under the Right to Information (RTI) Act filed by a Neemuch-based activist Chandrashekhar Gaud, to which the RBI responded that in the past five financial years, as much as 3400 branches of 26 public sector banks have been closed or merged. Of these, 75% of the branches are of State Bank of India (SBI), which is India’s biggest lender.
Here’s the complete breakdown of the merged banks in the last five years:
- FY 2014-15 – 90 branches closed/merged
- FY 2015-16 – 126 branches closed/merged
- FY 2016-17 – 253 branches closed/merged
- FY 2017-18 – 2083 branches closed/merged
- FY 2018-19 – 875 branches closed/merged
The reply also states that the maximum number of branches of SBI, 2,568 were affected by mergers or closing in the last five financial years. Additionally, the Bharatiya Mahila Bank, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore were merged with the SBI from April 1, 2017.
Merger Of 10 Banks Into Four; Massive Strike In The Country; Is Merger Necessary?
And of course, lest we forget, in this year’s April 1, there will be the merger of Vijaya Bank and Dena Bank with the Bank of Baroda. Disgruntled bank employees have announced a massive strike against this merger that will be on March 27th.
As per C H Venkatachalam, General Secretary of All India Bank Employees’ Association (AIBEA), at least 7000 branches of these banks will probably be affected if the government goes ahead with this plan of forming four banks from ten. He also said that most of these branches will be from metros and cities, and it is definite that there would be a decline in the business of the PSBs.
However, Economist Jayantilal Bhandari has opinionated that this merger is necessary at this moment. He said, “In addition, the large state-run banks will be able to distribute relatively more loans to the common people due to their strong financial condition, which will spur the economic growth in the country.”
History shows that once a bank is closed or merged, customers take their business elsewhere, causing more downfall.
Will the Government still go ahead with the merger? We’ll keep you updated as more details come in!