Bank Merger News : 6 Government Banks are going to be Merged, the Government has Released the List of Banks.
Bank Merger News : Bank mergers are once again in the spotlight as the government aims to create world-class Public Sector Banks (PSBs) capable of competing globally. The objective is to consolidate smaller state-owned banks into stronger, more efficient institutions with the ability to operate at scale. India’s largest public sector bank, State Bank of India (SBI), has also supported this next phase of consolidation to boost market value, reduce NPAs, enhance digital capability, and improve global competitiveness.
Which banks could merge next?
Currently, discussions revolve around six government banks—Bank of India, Indian Overseas Bank, Central Bank of India, Bank of Maharashtra, UCO Bank, and Punjab & Sind Bank. According to reports, these banks may merge with each other or be absorbed into larger PSU banks in the future. Between 1993 and 2025, India has witnessed several major mergers in the banking sector. These mergers have played a vital role in enhancing capital strength, improving credit support, upgrading technology, reducing operational costs, and increasing risk diversification. The government’s long-standing goal has been to create fewer but stronger public sector banks.
The largest consolidation in April 2017
The biggest consolidation took place in April 2017 when SBI merged its five associate banks—State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Patiala, State Bank of Mysore, and State Bank of Travancore—along with Bharatiya Mahila Bank. This integration made SBI the largest public sector bank in India. Former Finance Minister Arun Jaitley had introduced the idea of “fewer but stronger banks.”
Three-way merger in April 2019
In April 2019, a major three-way merger took place when Bank of Baroda absorbed Vijaya Bank and Dena Bank. After this consolidation, Bank of Baroda became India’s third-largest public sector bank.
Major mergers in April 2020
In April 2020, another wave of major mergers took place. Punjab National Bank (PNB) merged with Oriental Bank of Commerce and United Bank of India, becoming the second-largest PSU bank in the country based on branch network. During the same period, two more significant mergers occurred—Canara Bank acquired Syndicate Bank to become the fourth-largest PSU bank, and Union Bank of India merged with Andhra Bank and Corporation Bank to form the fifth-largest. In the same year, Indian Bank absorbed Allahabad Bank and emerged as the seventh-largest government bank.
What’s next?
Although the government has not officially announced which banks will be merged in the next phase, past trends show that most mergers are announced in April—the beginning of the financial year. Experts therefore expect major announcements in April 2026. According to media reports, the Finance Ministry is preparing a roadmap for another big round of consolidation. This time, mergers may not happen on a large scale all at once; instead, the process could take place in 2–3 phases to ensure smooth capital management and operational integration.
According to PL Capital, the government’s long-term objective is to reduce the number of public sector banks from 12 to around 6 or 7 strong, globally competitive banks. This would strengthen balance sheets, enhance lending capacity, improve operational efficiency, and provide better support for India’s rapidly growing infrastructure financing needs.