Govt likely to draw up mega PSB merger plan to trim state-owned banks to 4 in FY27

 

Smaller banks will first be merged into the bigger ones, and then consolidated further to form large entities

The government is working on an ambitious public-sector bank (PSB) consolidation blueprint that could reduce the number of state-owned lenders from 12 to just four in FY27 — with  State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BoB) and a merged Canara–Union Bank structure emerging as the likely four — a government source said.

The proposal, currently being shaped within the Finance Ministry,  plans to strengthen balance sheets, improve operational efficiency and create globally competitive banking institutions

The plan is to reduce the number of PSBs from the current 12 to four. Smaller banks will first be merged into the bigger ones, and then consolidated further to form large entities capable of supporting India’s growth needs,” the source told Moneycontrol.

Canara–Union Bank to be merged