Talks of a merger centre on two additional banking stocks: Bank of India and Bank of Maharashtra

 Talks of a merger centre on two additional banking stocks: Bank of India and Bank of Maharashtra

Talks of a merger centre on two additional banking stocks: Bank of India and Bank of Maharashtra

In the last hours of trade on December 15, the Nifty PSU Bank index increased 2.39 percent to 2.39 percent after a rumored government document circulated on social media said that the combination of four PSU banks was considered as early as January.

Over the last month, the PSU Bank index has increased by more than 13 percent, outpacing the Nifty 50 benchmark, the Bank Nifty.

PSU bank shares, which had gained traction in the previous session, will be under scrutiny on December 18, as rumors of a potential merger between Union Bank and UCO Bank, as well as Bank of India and Bank of Maharashtra, were stoked by a government document that went viral on social media. commenced.

Due to the document's widespread distribution, the Nifty PSU Bank index saw a 2.4% increase in the last two hours of trade on December 15. The benchmark Bank Nifty ended the day up 0.9%.

A legislative committee will meet with the four PSU banks in the first week of January to review the banking regulations, which govern M&A among other things, according to the document circulated on social media. The paper was "revised" shortly after that, removing all references to the term merger.

Under the condition of anonymity, a senior UCO Bank executive informed Moneycontrol, "A fresh letter has been sent as a result of misrepresentation in the letter from the previous meeting of the parliamentary committee. All of this is conjecture, and there isn't any such There is no longer a debate."

On December 15, amid merger negotiations, shares of Union Bank of India finished 3.92 percent higher at Rs 128.50 while shares of UCO Bank closed 1.12 percent higher at Rs 40.70 on the National Stock Exchange. Bank of Maharashtra was up 1.07% at Rs 47.25 on the NSE, while Bank of India was up 1.25% at Rs 113.

In the last month, the PSU Bank index has increased by more than 13 percent, surpassing the gains of the benchmark Nifty by 9 percent and Nifty Bank by 10.5%.

The government said in 2019 that after many mergers, the 27 public sector banks that existed in 2017 will be cut to more than half. According to Finance Minister Nirmala Sitharaman, India's GDP would not have reached $5 trillion without these next generation banks.

On April 1, 2019, Vijaya Bank and Dena Bank amalgamated to become Bank of Baroda. With the implementation of the most recent major consolidation cycle on April 1, 2020, ten PSBs were reduced to four.

The Punjab National Bank was formed by the merger of Oriental Bank of Commerce and United Bank of India; Syndicate Bank merged with Canara Bank; Andhra Bank and Corporation Bank combined to become UBI; and Allahabad Bank merged with Indian Bank.

The merger proposal excluded Bank of India, Bank of Maharashtra, and UCO Bank.