Will the number of public sector banks further come down to 10 from 12 next year? This could be within the realm of possibility, going by the agenda of the Lok Sabha’s Committee on Subordinate Legislation.

The Committee plans to discuss with the representatives of Union Bank of India (UBI) and UCO Bank (in Mumbai on January 2), and Bank of Maharashtra(BoM) and Bank of India(BoI) (in Goa on January 6) on the rules/ regulations framed under the Banking Regulation Act, 1949, and other relevant Acts as applicable to them and “the regulatory scenario in post-merger scenario”, per its agenda.

“That representatives of only four out of 12 PSBs were called for discussions, including on the regulatory scenario in post-merger scenario, by the Committee could be a harbinger of things to come,” said a banking expert.

Of the aforementioned banks, UCO Bank, BoM and BoI were left out of the last round of mega consolidation among PSBs. The mega consolidation, which took effect from April 1, 2020, saw 10 PSBs consolidate into four — Oriental Bank of Commerce and United Bank of India merged with Punjab National Bank; Syndicate Bank merged with Canara Bank; Andhra Bank and Corporation Bank merged with UBI; and Allahabad Bank with Indian Bank.

Prior to this mega consolidation, Vijaya Bank and Dena Bank had merged with Bank of Baroda with effect from April 1, 2019.


Experts say there may have been a rethink in the government on its earlier (Union Budget FY22) proposal to take up the privatisation of two PSBs.

In view of healthy balance sheets, robust profitability, decadal low non-performing assets and market price of most PSBs ruling higher than their book value, further consolidation could turn their valuations richer, netting considerable gains for the government, should it decide to privatise any of them down the line.

It may be pertinent to mention here that at the Indian Banks’ Association’s 74th annual general meeting in Mumbai in September 2021, Finance Minister Nirmala Sitharaman observed that India needs four to five more banks like State Bank of India (SBI) to meet the changing requirements of the economy and industry.

The Committee will also meet yje representatives of the Reserve Bank of India, the Insurance Regulatory and Development Authority of India, Life Insurance Corporation of India, four public sector general insurers, SBI Life Insurance Company, NABARD and IIFCL with reference to Acts, rules/ regulations governing them.