Bank Merger: The Central Government has made it clear that at present no new proposal regarding merger or consolidation of Public Sector Banks (PSBs) is under consideration.
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Bank Merger: The central government has clarified that no new proposals are currently under consideration regarding the merger or consolidation of public sector banks (PSBs). Minister of State for Finance Pankaj Chaudhary provided this information in a written reply in the Lok Sabha. He stated that previous bank mergers have helped create strong and competitive banks.
What are the details?
The Minister stated that the merger of PSBs has provided the benefits of scale and scope. This has helped the banks gain access to affordable deposits, the ability to issue larger loans, and increased operational efficiency. Furthermore, improved network utilization and increased financial efficiency have significantly expanded the customer base and market reach.
He also stated that since the merger, the banks have adopted best practices and rapidly implemented digitalization, reducing costs and making operations more efficient. Overall, these steps have strengthened the banks’ financial position and led to consistent growth in their overall business.
Bank Business
Citing RBI data, the government stated that the merged banks saw rapid business growth. For example, Bank of Baroda’s total business increased from ₹16.1 lakh crore in March 2019 to ₹27 lakh crore in March 2025. Similarly, Punjab National Bank’s business increased from ₹18.3 lakh crore to ₹26.8 lakh crore.
Similar growth was observed in other banks. Union Bank of India’s business increased from ₹15.3 lakh crore to ₹22.9 lakh crore, while Canara Bank’s business increased from ₹15.7 lakh crore to ₹25.3 lakh crore. Meanwhile, Indian Bank’s total business increased from ₹8.6 lakh crore to ₹13.3 lakh crore.
The next phase of banking reforms was also announced.
The government also announced the next phase of banking reforms. The EASE 9.0 reform agenda, launched in February 2026, aims to make Indian banks globally competitive by 2047. It will focus on risk management, innovation, customer service, artificial intelligence, and strengthening IT systems. New metrics will be implemented from April 2026.
Regarding the status of the rupee, the government stated that its value depends entirely on the market and there is no fixed target. The RBI intervenes in the market when necessary to prevent excessive fluctuations. According to the government, the rupee has come under pressure in the current financial year due to the rising trade deficit, crude oil prices, and global conditions. The RBI has also intervened for a total of ₹64,064 crore in 2024 and 2025, which helped stabilize the market.
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