The amalgamation of 10 public sector banks was approved by the union cabinet on Wednesday.
The amalgamation, to create large four state-owned lenders, will come into effect from April 1.
After the amalgamation, there will be seven large public sector banks (PSBs), and five smaller ones instead of 27 PSBs.
After the amalgamation, Oriental Bank of Commerce and United Bank of India will merge into Punjab National Bank; Syndicate Bank will merge into Canara Bank; Andhra Bank and Corporation Bank will merge into Union Bank of India, and Allahabad Bank will merge into Indian Bank.
“Sticking to the April 1, 2020 deadline, banks are fully on board,” Sitharaman said while speaking about the decision.
“The Cabinet may have given the decision today, they were on course and doing everything that requires to be done so that this (amalgamation) will be effective from April 1,” Sitharaman added.
In 2019, Dena Bank and Vijaya Bank merged with Bank of Baroda and before that, the government merged five associate banks of SBI and Bharatiya Mahila Bank with the State Bank of India.
The banks that are going to be amalgamated would soon be announcing their share-swap ratios on stock exchanges.
With a business size of Rs 17.94 lakh crore, Punjab National Bank will become the country’s second-largest bank after the merger,
With a business of over Rs 52 lakh crore, SBI will remain as the largest bank of the country.
Post amalgamation, Bank of Baroda will become the third-largest bank, followed by Canara Bank, Union Bank of India, Bank of India, and Indian Bank.
The other PSBs are Central Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra, and Punjab and Sind Bank.