The new PSB will have a total business of nearly Rs 18 lakh crore.
The government on Friday announced the merger of Punjab National Bank, Oriental Bank of Commerce and United Bank of India to create the second-largest banking network in the country with 11,431 branches.
"Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank of India (UBI) will be brought together and they shall form the second largest public sector bank (PSB) with the business of Rs 17.95 lakh crore," Finance Minister Nirmala Sitharaman said at a press conference in Delhi.
Also Read: Here is how mega-merger of PSBs will impact bank account holders
She said the creation of next-generation banks was imperative for India to become a US $5 trillion economy in the next five years.
Besides, seven other banks will be merged to form three larger Public Sector Banks (PSBs). The announcement made by Sitharaman covers 10 PSBs which will together form second, third, fourth and seventh largest PSB networks in the country.
Also Read: Sitharaman announces merger of 10 state-run banks to form 4 mega PSBs
Consolidated PNB+OBC+United Bank to be second largest PSB with Rs18 lakh crore business and second-largest branch network in India, Finance Secretary Rajeev Kumar said.
Scale, nationwide and global presence, and high CASA (Current Account Savings Account) to drive growth, he added.
Sitharaman said this will bring the total number of PSBs in India to 12.
"These big banks will have enhanced capacity to increase credit and bigger risk appetite, with national presence and global reach," said Sitharaman. Nearly 88 per cent of all PSB business will be with these consolidated banks," she said.
Also Read: Everything you need to know about new PSBs
All PSU banks will now have a non-executive chairman, a position earlier existed only in State Bank of India (SBI), India's largest lender. The PSBs will have to appoint a Chief Risk Officer, who will be provided market-level compensation. Longer terms will be given to directors on management committees to ensure continuity.
Apart from this, the government announced Rs 55,250 crore upfront as capital infusion in the PSBs.
Last week, Ms Sitharaman had announced that the government would release Rs 70,000 crore for bank capitalisation. While this amount is to be released upfront, she also announced additional lending and liquidity to the tune of Rs 5 lakh crore to PSBs.
(With ANI inputs)
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