The Amalgamation of Public Sector Banks Scheme 2020 aimed to merge several public sector banks (PSBs) in India, forming stronger financial entities that would be better equipped to handle economic challenges. The mergers primarily focused on improving the banks’ lending capabilities, increasing operational efficiencies, and strengthening their capital positions. The key merger was the combination of Punjab National Bank (PNB), Oriental Bank of Commerce (OBC), and United Bank of India, creating a larger entity with a more extensive branch network.
The integration of Canara Bank and Syndicate Bank, and similarly Union Bank of India with Andhra Bank and Corporation Bank, resulted in banks with significantly expanded market shares and a higher capacity for financial support in large-scale projects. The goal of these mergers was to create banks capable of handling higher business volumes, improving capital adequacy ratios, and reducing non-performing assets (NPAs) by leveraging better operational management.