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Economy No proposal for merger of Canara, Dena Bank, says...

No proposal for merger of Canara, Dena Bank, says Fin Min

Canara Bank is the fourth-biggest bank by market capitalisation behind State Bank of India, Bank of Baroda and Punjab National Bank

New Delhi: The Finance Ministry today said that there is no immediate proposal for merger of four public sector banks which include Syndicate Bank, Canara Bank, Vijay Bank and Dena Bank.

“Syndicate Bank, Canara Bank, Vijay Bank and Dena Bank have apprised that they have not made presentations about their merger or consolidation to the Ministry of Finance,” Minister of State for Finance Shiv Pratap Shukla said in a written reply to the Lok Sabha.

 It was reported recently that the government is looking to create a bigger bank in the next round of consolidation by getting state-run Canara Bank to take over smaller lenders Vijaya Bank and Dena Bank.

Canara Bank is the fourth-biggest bank by market capitalisation behind State Bank of India, Bank of Baroda and Punjab National Bank. The government is likely to push the proposal forward only after the monsoon session of Parliament gets over in August.

The government is looking at a three-tier structure for state-run lenders with around 10-12 banks as against the existing 21.

Earlier this month, finance minister Arun Jaitley had said after reviewing the performance of state-run banks that the government was “actively working” toward consolidation of public sector banks but declined to provide details, saying this was a price-sensitive information.

Dena Bank is among five public sector banks that have been put under the Reserve Bank of India’s prompt corrective action (PCA) programme which imposes various restrictions, including the sanction of fresh loans and dividend distribution. The other four are IDBI, Bank of Maharashtra, Central Bank of India and UCO Bank.

Dena Bank posted a loss of Rs 575.26 crore for the March quarter while Vijaya Bank reported a profit of Rs 204 crore for the same period. Canara Bank is among the top five banks in the country with a network of around 7,000 branches.

State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT), besides Bharatiya Mahila Bank (BMB), merged with SBI with effect from 1 April 2017.

With the merger, the total customer base of the bank will reach 37 crores with a branch network of around 24,000 and nearly 59,000 ATMs across the country.

The government had in February 2017, approved the merger of these five associate banks with SBI. Later in March, the Cabinet approved a merger of BMB as well.

SBI first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged with it.

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