Savings Schemes
by 5paisa Research Team Last Updated: 2023-04-21T13:58:12+05:30


Bank mergers have been a major development in the Indian banking industry. Mergers and acquisitions of banks are important mechanisms for financial consolidation, as they create larger entities with greater resources and reduced costs. This article looks at the list of bank mergers in India. We discuss which banks were merged when these mergers happened and their impact on the Indian banking landscape. We also look at the current state of merger activity in India and potential future mergers. Finally, we provide a list of banks and their merged entities, so readers can quickly find out which bank has been merged with which other bank in India.


What is Bank Merger?

Banking mergers involve two or more banks combining their operations and resources to become one. The merged entity is usually a larger bank with greater resources, which can benefit from reduced costs due to economies of scale. Merging also allows both banks to share risks, diversify their product offerings, increase investment returns, and expand into new markets. However, it can also enable banks to gain access to new technology and implement innovative solutions.

What are the Main Objectives of Bank Mergers in India?

The main objectives of bank mergers in India are:

●    To reduce costs and increase efficiency. Mergers can help banks become more competitive by reducing the cost of operating multiple branches.

●    To create larger entities with higher capital reserves, which can better handle financial shocks. This is particularly important for public sector banks, which may benefit from increased capital reserves in any financial crisis.

●    To diversify the product offerings and provide customers with more choices. Merging two banks can allow for a wider range of customer services, such as global banking products and new payment systems.

●    To increase investment returns by leveraging larger customer bases and economies of scale.

●    To create better risk management systems by pooling resources and reducing the impact of any bank's bad decisions.

●    To gain access to new technology and implement innovative solutions. Merging two banks can allow for the adoption of new technologies, such as mobile banking and artificial intelligence.

Importance of Merger

●    Mergers allow banks to become larger entities with greater resources and lower costs.

●    The increased capital reserves of larger banks can help them withstand financial shocks.

●    Mergers enable banks to diversify their product offerings and gain access to new technologies.

●    They create better risk management systems by pooling resources and reducing the risk associated with any single bank.

●    Mergers can increase investment returns by leveraging larger customer bases and greater economies of scale.

Latest List of Bank Mergers in India

The latest list of bank mergers includes the following: 


Merged with

Reason for merger

(PNB)Punjab National Bank

Oriental Bank of Commerce & United Bank of India

To create India's second-largest public sector bank and enhance operational efficiency. India's second-largest public sector bank, the Punjab National Bank (PNB), has now combined forces with both the (OBC) Oriental Bank of Commerce and the UBI United Bank of India. With this merger in place, PNB is expected to have a total branch network of 11,437 outlets and an overall business worth Rs. 17.95 lakh crore.

Bank of Baroda

Vijaya Bank & Dena Bank

To create India's third-largest public sector bank and enhance operational efficiency. After PNB, the second largest lender to have merged with other banks is the Bank of Baroda (BoB). The merger between BoB, Vijaya Bank, and Dena Bank has created a lending entity with a business worth Rs 14.82 lakh crore, making it the third-largest public sector bank in India.

 Union Bank of India

Andhra Bank & Corporation Bank

To create a stronger entity and enhance operational efficiency. The merger between Union Bank of India (UBI), Andhra Bank, and Corporation Bank has created a lender with an overall business worth Rs 14.59 lakh crore. This merger will make UBI the fifth-largest public sector bank in India.

Indian Overseas Bank

Sri Ram Finance

To expand its reach amongst retail customers and small businesses. Indian Overseas Bank (IOB) acquired Chennai-based non-banking financial company Sri Ram Finance in January 2019. With this acquisition, IOB will be able to increase its reach amongst retail customers as well as small businesses

Bank of India

Bharatiya Mahila Bank (BMB)

To increase its presence in the banking sector for women and enhance operational efficiency. In January 2019, the Bank of India acquired Bharatiya Mahila Bank (BMB), established exclusively to provide banking services to women. This merger aims to increase the bank's presence in the banking sector, catering to women customers while enhancing its operational efficiency.

Canara Bank

Syndicate Bank

To create India's fourth-largest public sector bank and enhance operational efficiency. Canara Bank and Syndicate Bank have completed their merger process, creating a lender with an overall business worth Rs 15.2 lakh crore. This merger has made Canara Bank the fourth-largest public sector bank in Indi



This list of bank mergers in India is expected to increase as more banks look for ways to become financial powerhouses and remain competitive

What Are the Challenges That Happen Due to Bank Mergers?

List of bank mergers can bring about numerous challenges. Here are some of the primary challenges that arise due to bank mergers:

●    Loss of jobs

Bank mergers often result in job losses as redundant roles and positions get eliminated. This can greatly impact the local economy, where affected employees may not have the necessary skills to find new jobs quickly.

●    Cultural differences

Merging two different cultures from two organizations is challenging and can lead to employee confusion, resistance, and frustration.

●    Brand identity

Merging two existing brands into one could be difficult as it requires careful consideration of both brand identities to ensure both customer bases are retained. It is important to preserve each brand's qualities and not to alienate either customer base.

●    Technology

As banks merge, they must also combine their IT systems and applications, which can be complex. This might result in technical glitches and disruption of services if the process is not managed properly.

●    Employee issues

Merging two or more banks will also require employee roles and responsibilities changes. This could lead to resistance from some employees as they are uncomfortable with change or find it difficult to adjust to new roles.

●    Regulatory issues

Banks that merge may have different regulatory requirements, making it difficult for both entities to comply with all necessary regulations. Ensuring that all regulatory requirements are met during the merger process is important. Otherwise, penalties may apply.

●    Integration

Merging two banks will also require careful integration of both entities to ensure a seamless transition and minimal service disruption. This process of integration is often complex, time-consuming, and costly.

●    Lack of communication

All stakeholders need to be kept informed during the merger process; however, this is often not the case, leading to confusion and misunderstanding amongst all involved.

●    Legal issues

As with any business transaction, there are legal issues that must be dealt with during mergers, such as contracts, liabilities, and investments. Both parties need to address these matters before proceeding with any merger.

How Do List of Bank Mergers Impact, Customers?

List of bank mergers, and mergers in general can have both positive and negative impacts on customers. Here are some of the possible ways in which customers could be affected:

    Availability of services

The merger of two banks can lead to new services and increased service availability and geographical coverage for customers. However, some existing services might be discontinued or reduced due to the merger.

●    Changes in fees

There may also be fees for the merged bank's services. Customers should carefully review these changes before deciding their banking needs.

●    Accessibility

Depending on the terms of the merger, customers may experience changes in accessibility, such as different ATMs or branches available to them.

    Changes in customer service

Customers might also experience changes in the quality of customer service provided by the merged bank and changes in policies and procedures related to banking products and services.

●    Additional benefits

On the other hand, customers may benefit from additional services such as online banking, mobile banking, and more that are available due to the merger.

Terms After PSU Bank Merger

The Indian government has taken  multiple steps to reduce the public sector banks in India through bank mergers. After a merger, the current terms and conditions of all involved banks will be merged. This includes interest rates, deposit schemes, cards, loans, and advances. Customers will benefit from increased access to banking services such as ATMs, branches, mobile banking, and other payment solutions. 

Furthermore, they can also avail new products and services the merged entity offers. Post-merger customers must review their account details to ensure that all information is up-to-date and accurate.

The Benefit of List of Bank Mergers & Benefits of Banks Through Merger

●    Increased efficiency and cost savings

Merging two banks can increase efficiency as the combined entity will have a larger pool of resources, resulting in lower customer costs.

●    Enhanced customer service

With increased scale, a merged bank can provide enhanced customer service and improved access to banking services.

●    Improved technology capabilities

Mergers can also lead to better use of technology, such as digital payments and mobile banking.

●    Risk management

By combining their risk portfolios, merged banks may be able to manage their risks better, leading to a more secure banking experience for customers.

●    New products & services

A merged entity may also offer new products and services previously unavailable.

●    Increased geographic coverage

Mergers can also increase geographic coverage, allowing customers to access banking services across a larger area.

●    Access to capital

By combining their resources, merged banks may access more capital, which could, in turn, lead to improved lending capabilities and better customer service.

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Frequently Asked Questions

Before the merger of public sector banks in India, there were 21 public sector banks. After the above mentioned list of bank mergers process is complete, there will be 12 public sector banks.

The independent public sector banks that will remain post-merger are State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank, Union Bank of India, Indian Overseas Bank, Central Bank of India, Indian Bank, UCO Bank, Punjab & Sindh Bank.

Bank merging and this list of bank mergers can have both positive and negative effects on the economy. On the one hand, it might lead to increased efficiency, cost savings, improved customer service, access to capital, enhanced product offerings, and more. On the other hand, customers may experience a decrease in accessibility or changes in the quality of customer service.

Bank mergers in India are not new, as the country has seen numerous bank mergers. The most recent round of bank mergers began in 2017 and is likely to continue into 2021. These mergers aim to reduce the total number of public sector banks to 12.

Whether bank mergers benefit the economy or not depends on various factors. Factors such as cost savings, efficiency, customer service, and access to capital all play an important role in determining whether bank merging benefits the economy.

The most recent bank merger in India was the proposed amalgamation of Bank of Baroda, Vijaya Bank, and Dena Bank which became effective on the 1st of April 2020. This merger has formed one of the largest banks in India, with a total business of Rs.14.82 lakh crore.