Finance Minister Nirmala Sitharaman said, “We are an economy of 2.7 lakh crore now.” Our economy is moving towards becoming a 5 lakh crore economy. He said that there is a great need for reform in public sector banks.
So far 8 state-owned banks have introduced interest rates based on PSU banks repo rate. Under difficult circumstances, 4 NBFCs have received help from public sector banks.
Sitharaman said that in the current era there is a great need for reform in the banking sector. He said the government is taking every necessary step to speed up growth.
Sitharaman said that the government is taking important steps to increase loan growth.
-A bank is strict in CBS to stop fraud.
NBFCs got Rs 3300 crore under the guarantee plan.
– They said we need to strengthen the financial sector. 3.38 lakh paper companies have been closed after coming to our government. Consortium of banks can now include only 7 to 9 banks for funding any project. No matter how big the project is, the number of banks in the consortium will not increase.
-Gross NPA decreased. It has come down from Rs 8.65 lakh crore to Rs 7.9 crore.
– The profits of banks have increased. Out of the total 18 state-owned banks, 6 banks showed profits in the fourth quarter of fiscal year 2019. Now 14 banks were profitable in the first quarter of fiscal year 2019-20. The asset quality of banks has improved significantly.
On the merger of Dena Bank and Vijaya Bank with Bank of Baroda, Sitharaman said, CASA growth has increased after the merger.
Oriental Bank of Commerce (OBC) and United Bank will merge with Punjab National Bank. Punjab National Bank will become the second largest government bank. Its business will be Rs 1.75 lakh crore. It will have a total of 11,437 branches. Before this plan of merger, we have kept in mind the guidelines of RBI on Basil rules.
Syndicate Bank will merge with Canara Bank. It will become the fourth largest government bank in the country. Its business will be Rs 15.20 lakh crore.
Andhra & Corporation Bank will be merge with Union Bank. Its business will be Rs 14.59 crore. The merger of the banks will not overlap the network and save the cost of the banks.
Indian Bank will merge with Allahabad Bank. After the merger it will become the seventh largest state-run bank in the country. Its business will be Rs 8.08 lakh crore.
– The date of the merger will be announced later.
Breakup of capitalisation:
10 PSBs will get a total of Rs 55,250 crore. Here is the breakup:
Punjab National Bank — Rs 16,000 crore.
Union Bank of India — Rs 11,700 crore.
Bank of Baroda — Rs 7,000 crore.
Canara Bank — Rs 6,500 crore.
Indian Bank — Rs 2,500 crore.
Indian Overseas Bank — Rs 3,800 crore.
Central Bank of India — 3,300 crore.
UCO Bank — Rs 2,100 crore.
United Bank of India — Rs 1,600 crore.
Punjab & Sind Bank — Rs 750 crore.
Reference : www.moneycontrol.com & www.economicstimes.com