Mega bank merger: Meeting deadline of April 1 challenging

With the deadline of April 1 fast approaching for the mega merger of ten public sector banks, there seems to be more odd in the way of meeting the target date as a series of regulatory approvals and clearances are still pending, bank officials said.

Even after Cabinet approval to the proposed mega merger plan, officials said, fixation of share swap ratio, shareholders consent and other regulatory approvals are expected to take at least 30-45 days.

It is believed that the Prime Minister's Office (PMO) has sought details from these lenders about their financial projections for the next three to five years. Details in respect of NPAs, capital requirement, credit growth and cost savings on account of the mergers have been asked for, officials said.

So, chances of the merger becoming a reality beginning next fiscal year seems little unrealistic at the moment, a senior public sector bank official said.

Besides, regulatory nods, the Scheme of Amalgamation has to be laid before Parliament for 30 days for the perusal of the members. The second-half of the Budget session is scheduled to start on March 2.

Last year in August, the government announced the consolidation of ten public sector banks (PSBs) into four mega state-owned lenders.

As per the plan, UBI and Oriental Bank of Commerce would merge with Punjab National Bank, making the proposed entity the second largest public sector bank.