FM Sitharaman to review PSU banks' merger preparedness

NEW DELHI: Finance Minister Nirmala Sitharaman will meet the heads of PSU banks on Thursday to discuss mergerrelated issues and review their preparedness to execute the process within the stated timeline of April 1, 2020.

"Tomorrow's PSB meeting will take up some of the key issues which relate to passing of low cost of borrowing and NPA settlement, doorstep banking and also the merger execution strategies to be taken up by the merging and anchor banks to iron out glitches," a source said.

The meeting will be held under the chairmanship of Sitharaman along with banking secretary Rajeev Kumar.a

This meeting will take place after the general review meeting on follow-up action with respect to RBI rate cuts, introduce reporate linked loan products to step up affordable credit that will take place on the same day. One time settlement policy on NPAS will also be discussed including door step banking. Secretary, Financial services, will chair this meeting and the FM will be briefed on this meeting.

Another issue on the agenda of Thursday's meeting could be one-time settlement policy on NPAS, including doorstep banking. Consolidating the 10 banks into four and converting them into 'Nextgen banks', the Finance Ministry has decided to merge United Bank of India (UBI) and Oriental Bank of Commerce (OBC) with Punjab National Bank (PNB) to give birth to India's second largest public sector bank after the State Bank of India (SBI).

The PNB merger, which will make the bank bigger than Bank of Baroda (BOB), will come into effect from April 1 next year. Besides PNB, Canara Bank and Syndicate Bank will also be merged into one. Union Bank of India will amalgamate with Andhra Bank and Corporation Bank while Indian Bank will merge with Allahabad Bank.