Factcheck - Merger of UCO Bank & Bank of Maharashtra News

Last week many of the leading news paper had reported the further consolidation of UCO Bank & Bank of Maharashtra with Union Bank and Bank of India respectively. 

In this regard the finance ministry has provided the clarification and put the stop on all such speculation.

The Union finance ministry has rectified the agenda of a parliamentary committee meeting scheduled for early next year, putting an end to speculation of a potential merger of public sector banks—UCO Bank with Union Bank of India, and Bank of India with Bank of Maharashtra.

This letter gave rise to speculation that Union Bank, which had just consummated a merger of Corporation Bank and Andhra Bank with itself, was set for another merger with the Kolkata-based UCO Bank. This was, however, put to rest after the ministry’s clarification on Saturday, in which the word “merger" was dropped from the letter. An executive director at one of the four banks clarified to newspaper Mint that there has been no discussion with the government regarding the merger, and the letter was just mis-interpreted by the public.

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“The parliamentary committee cannot initiate a discussion with the banks on the merger without the government’s involvement. We have had no talks with the government on the same," the banker said on the condition that he not be named.

In a letter addressed to, among others, the bank chiefs of the four PSU banks and Reserve Bank of India governor on Thursday, the finance ministry said that the members of the parliamentary committee would hold informal discussions with UCO Bank and Union Bank, besides Bank of India and Bank of Maharashtra, over the “regulatory mechanism in post-merger scenario".

One of the subjects of the meeting as listed out in the first letter dated 14 December said: “Informal discussion with representatives of Union Bank of India and UCO Bank on rules/regulations framed under Banking Regulations Act, 1949 and other relevant Acts as applicable to them and the regulatory mechanism in post merger scenario."

“The letter says post-merger scenario, which just means post the merger which happened two years ago," he said. On 1 April, 2020, 10 PSU banks merged to become four banks, as part of the mega bank consolidation plan. As per the scheme, Oriental Bank of Commerce and United Bank of India merged into Punjab National Bank; Syndicate Bank into Canara Bank; Allahabad Bank into Indian Bank; and Andhra and Corporation banks into Union Bank of India.

India currently has 12 PSU banks, from as many as 27 in 2017.

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