Post SBI, at least two PSBs may get merged with bigger bros soon

Banking majors are now moving towards acquisitions and mergers after some of the biggies of the telecom sector joined hands to create a single unified entity in the market. This trend was spearheaded by the biggest lender of the country SBI (State bank of India) now the government is planning to lay a roadmap to revamp the operations of some of the state-run lenders which include consolidation, public offers in the coming few months reported a leading business daily.

The banks such as Bank of Baroda, Punjab National Bank will rehash their present hiring policies and will promote lateral entries and might take over smaller lenders, in the long run, said an observer.

The Prime Minister’s office is actively searching for suitable candidates to activate this consolidation and to have few large banks rather than having several small banks. “We may start with some low-hanging fruit. For example, Punjab & Sind Bank can be merged into Punjab National Bank. Big lenders like Bank of Baroda can take over some turnaround banks in the southern region, like Indian Overseas Bank,” the official said an unnamed official to the business daily.
 
Insiders reveal that the RBI (Reserve Bank of India) is working in tandem with the Finance Ministry to bail out the banks from the NPAs and they are also framing some stricter rules which may push the small and medium lenders toward consolidation if they fail to stay within the set ambit of rules.
 
State Bank of India soaked five associate banks and Bharatiya Mahila bank, which further helped the bank to strengthen its foothold in the market. The government will expect a better show from the banks in the coming fiscal and government will help them to follow the Indradhanush road map through which banks are supposed to fish out Rs 1.8 lakh crore from the markets for capitalization, said an analyst.
 
In the latest interview to a leading news agency the Banks Board Bureau chief Vinod Rai, hinted towards this development and said that “two large Mumbai-based banks could join hands in the present financial year.