The Big Bank Theory! PNB + UBI + BOI merger next after BoB, Vijaya, Dena Bank?

In the round two of public sector banks merger, the government will reportedly call lenders for initiating discussions soon. The banks that may be called for discussions include Punjab National bank (PNB), Union Bank of India (UBI) and Bank of India (BoI), according to a report by The Economic Times.

The report today quoted a senior official of the finance ministry as saying that the government won't like to wait for long. Some merger activity can be expected in the second or third quarter of the ongoing financial year. 

Earlier this month, Bank of Baroda, Dena Bank and Vijaya Bank become one entity after the conclusion of the merger process that took several months. The government had announced the merger of these three banks in September last, creating the third largest bank in the country after State Bank of India and HDFC Bank. 

Two years before the merger of these three banks, State Bank had merged five of its associate banks- State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore and State Bank of Hyderabad and also Bhartiya Mahila Bank in April 2017.

Soon after the announcement of the merger of Bank of Baroda, Dena and Vijaya Bank in September last, Zee Business TV had reported two sets of probable bank mergers in future. It has said that the government was mulling merger of more banks. The two sets expected merger included Punjab National Bank + Indian Bank + Indian Overseas Bank and Canara Bank + Syndicate Bank + UCO Bank. 

Merging small banks is one of the ways in which the government is trying to tackle the NPA crisis.