The government is said to be considering a mega merger of 26 banks, which will create six big lenders, news agency Reuters reported, citing a government official, on Wednesday. The proposal envisages major banks like State Bank of India, Punjab National Bank, Canara Bank, Union Bank, Bank of Baroda and Bank of India leading the merger. As a part of the proposal, Syndicate Bank, IOB and UCO Bank will be merged with Canara bank.
Meanwhile, Central Bank and Dena Bank will be merged with Union Bank, the official said. Other banks like Andhra Bank, Bank of Maharashtra, Vijaya Bank will be merged with Bank of India. However, the management of Bank of India reportedly had no information about the merger. It also told CNBC-TV18 that HR integration will be the biggest challenge during the merger. No bank was free of bad loans and the merger will not help in any way, it added. The efforts for this merger of small banks are at a very initial state, the official informed.