Question

The recent amalgamation of public sector banks in India is aimed at multiple gains.

1. Economies of scale

2. Improved access to capital

3. Covering larger geographical areas

4. Bank of global size

Select the correct benefits using the codes given below:

Codes:

1. 1 and 2 only
2. 2 and 3 only
3. 1, 2 and 4 only
4. 1, 2, 3 and 4 only

Answer 1

Correct Answer - Option 3 : 1, 2 and 4 only

The correct answer is option 3.

• Canara Bank and Syndicate Bank will merge to create India's fourth-largest public sector bank (PSB) with a business of Rs15. 2 lakh crore.
• Union Bank of India (UBI), Andhra Bank, and Corporation Bank will be amalgamated to create India's fifth-largest PSB.
• Among the four mergers, the combined entity of Allahabad Bank and Indian Bank will have the lowest net NPA (non-performing assets), while boasting the highest provisioning coverage and strongest CASA (current account and savings account) franchise.
• “Indian Bank’s merger with Allahabad Bank will help it emerge as a strong entity with reach, improving provisioning coverage ratio (PCR) and strong CASA ratio,”. The merged entity also has the least branch overlap.