Canara Bank Current Affairs - 2020
The Reserve Bank of India is to implement a merger plan of 10 state-run banks into 4 larger banks from April 1, 2020. The Amalgamation of the banks had been notified by the GoI earlier of March 2020.
According to the plan, the United Bank of India and Oriental Bank of Commerce are to be merged with Punjab National Bank. The Syndicate Bank is to be amalgamated with Canara Bank. The Allahabad Bank is to be amalgamated with Indian Bank. Also, Andhra Bank and Corporation Bank are to be amalgamated with Union Bank of India.
The amalgamation plan has been initiated by the GoI. However, the plan is to be implemented by RBI. This is because the Reserve Bank plays the role of the apex in banking sector.
Section 7 of RBI act
The Section 7 of the RBI act empowers the GoI to make rulings on the functioning of RBI in matters of public interest. With this power, the Finance Minister has initiated the amalgamation plan and the plan has been approved by RBI.
Tags: Allahabad Bank • Bank Mergers • Canara Bank • Punjab National Bank • RBI
On March 4, 2020, the Union Cabinet chaired by Narendra Modi had approved mega consolidation of 10 Public Sector Banks.
The mega merger is to come into effect from April 1, 2020. It includes amalgamation of United Bank of India and Oriental Bank of India into Punjab National Bank. Also, amalgamation of Syndicate Bank into Canara Bank. The Cabinet also approved amalgamation of Corporation Bank and Andhra Bank into Union Bank of India. It also approved amalgamation of Allahabad Bank into Indian Bank
The Amalgamation will help these under performing banks get cost benefits. Also, each amalgamated bank will hold business of 8 lakh crore rupees. This will help the banks compete with other banks in India and also globally. It will also increase competitive spirit of the banks boosting Indian Banking System.
How is Amalgamation different from Merger?
A Merger is where two or more business entities combine to form a new entity. On the other hand, in amalgamation one business entity acquires one or more business entities.
Tags: Bank Merger • Cabinet Approval • Canara Bank • Indian Bank • Indian Banking System