The finance ministry on Monday mentioned there is no such thing as a proposal at current to merge or consolidate public sector banks, even because it famous that previous amalgamations have helped create bigger, extra aggressive lenders with improved effectivity and scale.
“Leveraging of networks, higher entry to low-cost deposits, elevated potential to assist bigger ticket-size lending and aggressive operations by advantage of higher monetary capability has offered the amalgamated banks a considerable rise in buyer base, market attain and operational effectivity,” minister of state for finance Pankaj Chaudhary mentioned in a written reply within the Lok Sabha.
“Synergy was additionally gained because of elevated scope of operations, and enchancment in value effectivity with adoption of finest practices and digitisation,” he mentioned.
The federal government’s final consolidation drive, introduced in August 2019 and applied from 1 April 2020, has lifted the mixed enterprise of main state-run lenders, the minister mentioned.
Financial institution of Baroda, into which Vijaya Financial institution and Dena Financial institution had been merged, expanded from ₹16.1 trillion in March 2019 to ₹27.0 trillion in March 2025. Punjab Nationwide Financial institution, which amalgamated Oriental Financial institution of Commerce and United Financial institution of India grew from ₹18.3 trillion in March 2020 to ₹26.8 trillion in March 2025.
Union Financial institution of India, which absorbed Andhra Financial institution and Company Financial institution grew from ₹15.3 trillion in March 2020 to ₹22.9 trillion in March 2025. Canara Financial institution, which merged with Syndicate Financial institution expanded from ₹15.7 trillion in March 2020 to ₹25.3 trillion in March 2025. Indian Financial institution, which amalgamated Allahabad Financial institution grew from ₹8.6 trillion in March 2020 to ₹13.3 trillion in March 2025.
Chaudhary mentioned consolidation has strengthened monetary soundness and streamlined operations, decreasing prices and boosting total enterprise.
In Union finances FY27, finance minister Nirmala Sitharaman had mentioned the federal government will quickly represent a high-level committee on banking for Viksit Bharat to attract up a blueprint to create mega lenders able to assembly the financing wants of a developed India.
At a banking sector evaluate occasion in October 2025, officers additionally set a goal for 2 to a few state-run banks to enter the world’s prime 20 by 2047, signalling a shift from stabilisation to development and scale.
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