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The government is considering to merge minimum four state-run banks, as a part of larger consolidation plan.
The banks that could be merged are: Bank of Baroda, IDBI Bank, Oriental Bank of Commerce and Central Bank of India. These four banks are under pressure with combined loss of Rs.21,646.38 crore in the financial year 2017-18. The merger will allow the weak banks to sell assets, reduce overheads and shut money-losing branches.
Except Bank of Baroda, all three banks are under the RBI’s Prompt Corrective Action (PCA) framework. If the plan goes through, the merged entity will become the second-largest bank in the country after State Bank of India, with combined assets of Rs.16.58 trillion.
