Decoding the 'Big Bank theory! Walking the $5 trillion path, Sitharaman timely makes a move to 12 from 27 PSBs
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New Delhi, August 30: “What has been received from the RBI, the government will take a call how to use it”, said Finance Minister Nirmala Sitharaman referring to the major transfer of Rs 1.76 lakhs crore to the government, made by the RBI.
She was addressing a press conference in the national capital today where she set a final roadmap for the Public Sector Unit Banks, merging the total of 27 into 12. She further gave approximate numbers for the amount of capital that will be infused in state-run banks. “This capital infusion will be for growth and not for consolidation”, she said.
Capital Infusion Schedule :
Punjab National Bank: Rs 16,000 crore
Union Bank of India: Rs 11,700 crore
Bank of Baroda: Rs 7,000 crore
Canara Bank: Rs 6,500 crore
Indian Bank: Rs 2,500 crore
Indian Overseas Bank: Rs 3,800 crore
Central Bank of India: Rs 3,300 crore
UCO Bank: Rs 2,100 crore
United Bank: Rs 1,600 crore
Punjab & Sind Bank: Rs 750 crore
Meanwhile lauding the decision, NITI Aayog Chief Rajiv Kumar said that this was the right time to consolidate banks to enable them to make India a $5 trillion economy,
He also said that the alternate mechanism had given its approval for the mergers. “The bank’s boards will consider the proposals. Each bank will take the proposal to their respective boards and then the permission will be sought from the RBI. The merger will create six globally competitive banks”, he added.
India will now have 12 public sector banks, being Punjab National Bank, Canara Bank, Union Bank of India, Indian Bank, State Bank of India, Bank of Baroda, Bank of India, Central Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra, and Punjab and Sind Bank.