A big update is expected to materialise in the banking industry. As per sources and media reports, Union Bank of India and Bank of India may be merged soon. The merger could be completed by the end of the calendar year.
The initial merger process between Union Bank of India and Bank of India (BoI) seems to have begun.
Both banks are currently undertaking due diligence, including internal assessments of processes and operational integration.
The government wants to merge smaller banks with larger ones to create four to five big PSU banks instead of the current 12 banks.
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What will be the impact of Merger?
The merger would create one of the country’s largest public sector lenders. The combined entity would become the second-largest PSU bank, with assets of about ₹25.4 lakh crore in FY25, and the third-largest bank overall after State Bank of India and HDFC Bank.
In terms of market capitalisation, the merged bank would rank sixth at about ₹2.13 lakh crore at current prices, overtaking Bank of Baroda, Canara Bank and Punjab National Bank. At present, Union Bank and Bank of India are the fifth- and sixth-largest PSU banks, respectively.
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As of today the share price of Union Bank of India is Rs.180.02 and the share price of Bank of India is Rs. 164.
Earlier between 2017 and 2020, 10 public sector banks were merged into four larger entities, reducing the number of state-owned banks to 12 from 27. After that the Government of India had announced to merge or privatise banks and only 4 PSU banks would remain in India.
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