As per sources, the government of India is drawing up a fresh blueprint to merge some public sector banks. As per sources, Government is planning to merge Union Bank of India and Bank of India. If the merger goes as planned, it will create a second largest bank in India after the country’s top bank by assets, State Bank of India.
Both – Union Bank of India and Bank of India are headquartered in Mumbai. The second largest public sector bank in India is Bank of Baroda with total assets of ₹18.62 trillion as of 30 June 2025. This asset base ranks it fourth among all banks, including private banks – HDFC Bank and ICICI Bank. A merged Union Bank of India and Bank of India would have assets of ₹25.67 trillion.
The ministry is also thinking to merge Indian Overseas Bank and Indian Bank. Both Banks are headquartered in Chennai. Punjab & Sind Bank and Bank of Maharashtra are being considered for privatization in later phases.
Other government-controlled banks may be considered for amalgamation. Timelines for amalgamation have not been finalized but the process most likely would follow in FY27.
The government is working on a mega merger plan that could combine smaller banks with larger ones to create fewer but stronger institutions. The aim is to strengthen the banking system, make it more efficient, and support the next phase of credit growth and financial reforms.
Earlier there were reports that the government is considering merging Indian Overseas Bank (IOB), Central Bank of India (CBI), Bank of India (BOI), and Bank of Maharashtra (BoM) with larger banks such as Punjab National Bank (PNB), Bank of Baroda (BoB), and State Bank of India (SBI).
