Bank Mergers 2019 20/Public Sector Banks merger


Bank Mergers 2019-20
Welcome to Nagraj Educational Services. This Bank Mergers 2019-20
Welcome to Nagraj Educational Services. This video is about the Bank Mergers 2019-20. Government
has given clearance for consolidation by way video is about the Bank Mergers 2019-20. Government
has given clearance for consolidation by way of mergers of 10 Public sector banks. The
following banks are going to be merged. of mergers of 10 Public sector banks. The
following banks are going to be merged. Oriental Bank of Commerce and United Bank
of India with Punjab National Bank Oriental Bank of Commerce and United Bank
of India with Punjab National Bank Syndicate Bank with Canara Bank
Andhra Bank and Corporation Bank with Union Syndicate Bank with Canara Bank
Andhra Bank and Corporation Bank with Union Bank of India
Allahabad Bank with Indian Bank Bank of India
Allahabad Bank with Indian Bank PNB, Canara Bank, Union Bank of India and
Indian Bank are Anchor Banks which takes the PNB, Canara Bank, Union Bank of India and
Indian Bank are Anchor Banks which takes the other banks into their fold.
Mergers and Acquisitions are business strategies other banks into their fold.
Mergers and Acquisitions are business strategies of any corporate. Banking Sector is no exception.
Let us learn more about this. The arguments of any corporate. Banking Sector is no exception.
Let us learn more about this. The arguments for and against and the points on which the
mergers are going to be helpful to the nation, for and against and the points on which the
mergers are going to be helpful to the nation, industry or otherwise.
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When we look at the arguments for the proposed video till the end.
When we look at the arguments for the proposed merger,
the consolidation—the country needs very merger,
the consolidation—the country needs very large banks to compete with the global banks
and the results of the existing small sm large banks to compete with the global banks
and the results of the existing small small size banks will be merged into big banks and
consolidation of the results. size banks will be merged into big banks and
consolidation of the results. Then, risk management is possible. Risk appetite
of large banks is better than the smaller Then, risk management is possible. Risk appetite
of large banks is better than the smaller banks.
The cost of lending operations will be reduced. banks.
The cost of lending operations will be reduced. With the large size, global competition is
possible. With the large size, global competition is
possible. The economies of scale is possible.
The banks will get autonomy, the bank boards The economies of scale is possible.
The banks will get autonomy, the bank boards will get autonomy for identifying the best
skills in the banking industry to promot will get autonomy for identifying the best
skills in the banking industry to promote them and for succession planning.
Then, when the bank becomes very big, high them and for succession planning.
Then, when the bank becomes very big, high level of investment in technology is possible.
It promotes the digital banking, digital services level of investment in technology is possible.
It promotes the digital banking, digital services in a very faster manner and which gives innovation
to the new products and services. in a very faster manner and which gives innovation
to the new products and services. Then, standardization of internal procedures
is possible. Then, standardization of internal procedures
is possible. The Banks as on March 2019 have already complied
with Basel III norms including capital adequacy The Banks as on March 2019 have already complied
with Basel III norms including capital adequacy ratio. These are the figures of CRAR-Capital
to Risk weighted Assets Ratio in ratio. These are the figures of CRAR-Capital
to Risk weighted Assets Ratio in terms of percentage. Almost all the banks except PNB
have already complied with Basel Norms and percentage. Almost all the banks except PNB
have already complied with Basel Norms and also the RBI guidelines on CRAR. So, the argument
for is, “this is the right time for merger also the RBI guidelines on CRAR. So, the argument
for is, “this is the right time for merger because we have complied with the capital
adequacy norms”. So, after merger also, because we have complied with the capital
adequacy norms”. So, after merger also, there may be small variations in the CRAR
but nevertheless the timing is proper. there may be small variations in the CRAR
but nevertheless the timing is proper. The arguments against:
Many of these banks have history of over 100 The arguments against:
Many of these banks have history of over 100 years and the loss of identity, the attachment
of customers to a particular local area is years and the loss of identity, the attachment
of customers to a particular local area is lost and employees and customers will lose
the sense of belonging. They cannot easily lost and employees and customers will lose
the sense of belonging. They cannot easily adjust themselves. Because there is no other
way, we are bound to accept it but the loss adjust themselves. Because there is no other
way, we are bound to accept it but the loss of identity will definitely be there.
In the large size banks, the power distance—the of identity will definitely be there.
In the large size banks, the power distance—the distance between the decision making authority
and the ultimate delivery point is also an distance between the decision making authority
and the ultimate delivery point is also an argument against merger.
The emotional issues, regional and cultural argument against merger.
The emotional issues, regional and cultural issues also play a part
The relocation and rationalization comes at issues also play a part
The relocation and rationalization comes at a cost both to the bank and to the customer.
Then, the timing is improper, for the simple a cost both to the bank and to the customer.
Then, the timing is improper, for the simple reason that the NPA levels are increasing,
increasing frauds and other cases. So, the reason that the NPA levels are increasing,
increasing frauds and other cases. So, the attention could have been to reduce the NPA
levels below 5% and then the merger process attention could have been to reduce the NPA
levels below 5% and then the merger process could have taken place. So the timing is supposed
to be said improper. could have taken place. So the timing is supposed
to be said improper. Then, the Big Bank theory is only a DREAM.
If we look at the post merger assets of these Then, the Big Bank theory is only a DREAM.
If we look at the post merger assets of these banks..SBI after merger..39 lakh crores. I
am talking in terms of Assets and with this banks..SBI after merger..39 lakh crores. I
am talking in terms of Assets and with this 39 lakh crores, it has occupied 54th position.
So none of the banks including SBI could not 39 lakh crores, it has occupied 54th position.
So none of the banks including SBI could not get the world’s top 50. Then, if we look
at the other banks post merger, Indian Bank get the world’s top 50. Then, if we look
at the other banks post merger, Indian Bank 5.30 lakh crores, Canara Bank 10.25 lakh crores,
PNB 12.13 lakh crores, Union Bank of India 5.30 lakh crores, Canara Bank 10.25 lakh crores,
PNB 12.13 lakh crores, Union Bank of India 9.66 lakh crores .. These figures are far
less than the State Bank of India. So the 9.66 lakh crores .. These figures are far
less than the State Bank of India. So the dream of having large banks to be in top 50
banks of the world becomes a dream. dream of having large banks to be in top 50
banks of the world becomes a dream. So, the total assets and the CRAR figures
are taken from the Annual Reports of the Banks So, the total assets and the CRAR figures
are taken from the Annual Reports of the Banks as on March 2019.
Thanks for watching this video. Your comments, as on March 2019.
Thanks for watching this video. Your comments, suggestions, querries are welcome. I will
be happy to answer them. suggestions, querries are welcome. I will
be happy to answer them. Please SUBSCRIBE to my channel if not already
done. Please SUBSCRIBE to my channel if not already
done. Thank you once again Thank you once again

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