Government may call Punjab National Bank, Union Bank of India and Bank of India to discuss merger plan

According to the finance ministry official, the government is soon likely  may call Punjab National Bank (PNB), Union Bank of India and Bank of India (BOI). The call is for to discuss on a second round of merger in public sector banks.

The first round of merger in public sector banks, the government had proposed the merger of three banks in October 2018 to create the country's third-biggest lender. According to this, Both Vijaya Bank and Dena Bank were merged with Bank of Baroda (BoB) which came into effect from April 1, 2019.

"We wouldn't like to wait for too long. If the banks are not able to give options then the alternate mechanism (AM) group can make suggestions", the official said.

The Reserve Bank of India had pulled out Bank of India, Oriental Bank of Commerce and Bank of Maharashtra from its PCA framework in february 2019, which imposes certain lending restrictions on financially weak banks.

"Bank of India has just come out of the Reserve Bank of India PCA (prompt corrective action) framework. Union Bank of India and Punjab National Bank are also in early recovery stage", the government official said.

"It need not be a tripartite merger again. We will be looking at various combinations. It has to be organic, besides we will like some of these large banks to further consolidate their balance sheets in the first two quarters", the official added.