PNB likely to take control of 2-3 small state-run banks
New Delhi: The Punjab National Bank (PNB) is looking to merge with two or three government-owned banks that could include Oriental Bank Of Commerce, Andhra Bank and Allahabad Bank, according to two sources familiar with the situation told Reuters.
The PNB could start the process of taking control of the banks in the next three months, Reuters reported.
The proposal to merge PNB with 2-3 other banks would be put before the cabinet for its nod, Reuters reported quoting government source.
The Narendra Modi Government has been striving to revive the health of public sector banks. In February, it announced a recapitalisation tranche of Rs 48,239 crore for as many as 12 public sector banks in a bid to take them out of Reserve Bank of India’s (RBI) Prompt Corrective Action (PCA) framework. Their lending ability was constrained by RBI when they were put under this framework.
The 12 banks are Allahabad Bank, Corporation Bank of India, Bank of India, Bank of Maharashtra, Punjab National Bank, Union Bank of India, Andhra Bank, Syndicate Bank, Central Bank of India, United Bank of India, UCO Bank and Indian Overseas Bank.
Currently, there are 20 state-run banks following mergers of small banks with State Bank of India and Bank of Baroda, and with IDBI Bank taken over by state-run Life Insurance Corporation.