In your interest.
Online Personal Finance Magazine
No beating about the bush.
"We shall continue with two banks, which will have national presence—Bank of India with Rs9.3 lakh crore of business size and Central Bank of India with Rs4.68 lakh crore of business size," the minister says.
Indian Overseas Bank (IOB), UCO Bank, Bank of Maharashtra and Punjab and Sind Bank would continue to be independent lenders.
Explaining the rationale behind merger of OBS (Oriental Bank of Commerce) and United Bank with PNB, the minister says, all three lenders use same banking software, which will enable them to realise gains quickly. "The consolidated bank will have high current account saving account (CASA) ratio and lending capacity. The merger will led to higher cost reduction due to network overlaps. It will also save cost and provide more income opportunities for joint ventures and subsidiaries of these banks," she added.
The merger of Syndicate Bank with Canara Bank, Andhra Bank and Corporation Bank with Union Bank and Allahabad Bank with Indian Bank will also result in similar realisations.
In large banks the strength of executive directors is enhanced to four, Ms Sitharaman says adding, "Flexibility is being given to bank boards of large PSBs to enhance sitting fees of non-official directors (NODs). Bank boards are given mandate to reduce or rationalise board committees. In addition, MCB loan sanction thresholds is now enhanced by up to 100%."
Talking about employees in PSBs, the FM said, from now onwards, board committee of nationalised banks would appraise performance of top management from general managers (GMs) and above. PSBs would now recruit chief risk officer from market. Bank board would also decide a system of individual development plans for all senior executive positions.
All India Bank Employees' Association (AIBEA) General Secretary CH Venkatachalam said that bankers will hold massive demonstrations on Saturday all over the country and also wear black badges.