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PSU banks rally amid mega merger buzz; Syndicate, Allahabad, OBC gain 4-9%

The Nifty PSU Bank index recovered 3.7 percent from day's low after this merger news and gained a percent at the time of publishing this article.

August 30, 2019 / 07:12 PM IST

Shares of PSU banks gained 1-13 percent on August 30 after a media reports suggested that government may announce mega merger plan.

Jammu & Kashmir Bank climbed 13 percent. Oriental Bank of Commerce, Syndicate Bank, Indian Bank, Central Bank of India and IDBI Bank were up 3-9 percent.

The Nifty PSU Bank index recovered 3.7 percent from day's low after this merger news and gained a percent at the time of publishing this article.

The government is charting out a mega merger plan for public sector banks (PSBs) and could make an announcement anytime now, as per a report by CNBC-TV18.

Chief executives of ten PSBs have been called for a meeting on August 30 by the finance ministry's department of financial services. The list includes Punjab National Bank, Union Bank, Canara Bank, United Bank of India, Allahabad Bank, Indian Bank, Oriental Bank of Commerce, Syndicate Bank, Corporation Bank and Andhra Bank.

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As per a Business Standard report, Punjab National Bank, Union Bank of India and Canara Bank might be banks which will be subsuming other PSBs. “It looks like PNB will be merged with three more banks, including Andhra Bank and Oriental Bank of Commerce,” a source told BS.

The government has already consulted the central bank on the subject earlier this year, sources additionally told the paper. According to the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980, the Centre is required to consult the Reserve bank of India in order to formulate and implement a plan for PSB mergers.

Sources told CNBC-TV18 that Finance Minister Nirmala Sitharaman is likely to brief the media on the consolidation plan.

Moneycontrol News
first published: Aug 30, 2019 03:48 pm

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