PSU Bank Stocks: Shares of PSU (public sector) banks rose as much as 4% during trading on Monday. This surge came after news of a new government plan to merge some public sector banks and privatize smaller ones.
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PSU Bank Stocks: Shares of PSU (Public Sector) banks saw a rise of up to 4% during trading on Monday. This rise came after the news of a new plan of the government, which includes merger of some government banks and privatization of smaller banks. After this news, Bank of Baroda is up by 4.26%. Indian Bank is up by 2.73%, Canara Bank by 2.18%, UCO Bank by 1.63%. Bank of India is up by 1.42, Punjab & Sind Bank by 1.38, State Bank by 1.06 and Central Bank by 1.01%. IOB, Union Bank of India, PNB, Bank of Maharashtra are also in the green.
Preparations underway to merge two major Mumbai-based banks
According to a report in the newspaper “Mint,” the Indian government is planning a merger between Union Bank of India and Bank of India. Both banks are headquartered in Mumbai. If this merger occurs, it will create the country’s second-largest public sector bank after State Bank of India (SBI).
Chennai banks may also be included
The report also states that the Finance Ministry is exploring the possibility of merging the Chennai-based Indian Overseas Bank and Indian Bank.
Privatization of smaller banks
This move is part of the government’s goal to strengthen the banking system in the coming years and reduce duplication in operations. In this context, according to the report, smaller banks like Punjab & Sind Bank and Bank of Maharashtra are being considered for future sale to private players, as their assets are smaller than those of other large public sector banks.
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