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Punjab National Bank to merge with OBC, United Bank to form India's 2nd largest PSB

The consolidated bank will have the second largest branch network in India hereafter, with 11,437 branches.

August 30, 2019 / 09:26 PM IST
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Finance Minister Nirmala Sitharaman today announced a mega consolidation drive, the biggest of which was the plan to merge Oriental Bank of Commerce and United Bank with Punjab National Bank.

Following the merger, the combined entity will become the second-largest public sector bank in the country, with a business of Rs 17.95 lakh crore, overtaking Bank of Baroda (which was last year merged with Dena Bank and Vijaya Bank).

The consolidated bank will also be the second-largest in terms of branch network with 11,437 branches, the FM said. The Punjab National Bank will serve as the anchor bank in this combination.

comparision after bank mergers_for website

The finance minister added that the merger would give a high CASA and lending capacity combined in the consolidated bank, would enable large cost reduction due to network overlaps,  and result in cost saving and income opportunities for the joint ventures and subsidiaries.

PNBOBCUnited BankAmalgamated Bank
Total deposits (in Rs cr)11,82,2244,04,1942,08,10617,94,526
Gross advances5,06,1941,71,54973,1237,50,867
Deposits6,76,0302,32,6451,34,98310,43,659
CASA ratio42.16%29.40%51.45%40.52%
Domestic branches6,9922,3902,05511,437
PCR61.72%56.53%51.17%59.59%
CET 1 Ratio6.21%9.86%10.14%7.46%
CRAR Ratio9.73%12.73%13.00%10.77%
Net NPA Ratio6.55%5.93%8.67%6.61%
Employees65,11621,72913,8041,00,649

She emphasised that the ministry has taken utmost care to ensure that the Core Banking Solution (CBS) platforms used by all three banks are compatible, in this case the platform being Infosys' Finacle.

"We've made sure that the technology which is used in bank 1, bank 2 and bank 3 are compatible and all three banks can enable a quick realisation of gains without customer disruption, or any other disruption in services that they lend," Sitharaman added.

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