PSU Bank Stocks Rise as Fake Merger Document Circulates Online; Government Rejects Claims

Stocks of some of the PSU banks saw an upward movement today as news reports of an alleged second wave of bank mergers went viral. The government has now debunked this report, saying that the document in question is not genuine and has been created without any involvement from the Ministry of Finance. 

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Shares of Bank of Maharashtra increased by 2% to hit ₹82.33, whereas State Bank of India gained 1% to ₹993 per share. Punjab National Bank was up by 1% at ₹118. 

Several other PSU banks witnessed positive momentum as well. Central Bank of India rose by 1.5%, whereas Indian Bank and Bank of India added 1% each. Shares of Indian Overseas Bank, Bank of Baroda, Union Bank of India and UCO Bank went up by around 0.5% each. 

While Canara Bank bucked the overall trend and closed lower by more than 0.5%. 

The development came after the reports of alleged Extraordinary Gazette of India notification surfaced online. The document said that the government had planned another wave of PSU bank mergers, wherein State Bank of India, Punjab National Bank and Bank of Baroda would amalgamate smaller banks. 

But the document is not genuine. 

PIB Fact Check clarified that it had not been issued by the Ministry of Finance and urged people to verify such material through official and credible sources before sharing or relying on it. 

The fake notification claimed that Indian Bank, Bank of Maharashtra and Central Bank of India would be merged into State Bank of India to create an SBI Group. 

It separately claimed that Union Bank of India, Bank of India and Punjab & Sind Bank would become part of Punjab National Bank, while Canara Bank, Indian Overseas Bank and UCO Bank would be transferred to Bank of Baroda. 

Presented as an “Amalgamation of Public Sector Banks Scheme, 2026”, the document also purported to cite Section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the corresponding 1980 legislation. It claimed the proposal had been prepared after consultation with the Reserve Bank of India. 

Other details in the circulating document covered the supposed transfer of assets, liabilities, rights, claims and obligations to the acquiring banks. It also claimed that employees would retain continuity of service and that existing customer accounts and banking arrangements would remain valid. 

None of those merger claims should be treated as a government announcement. The government’s clarification is that the document circulating online is fake and was not issued by the Finance Ministry.