Government Rules Out PSU Bank Mergers for Now, Says MoS Pankaj Chaudhary

The Minister of State for Finance, Pankaj Chaudhary, declared that the government presently has no proposals for merging public sector banks (PSBs), as per PTI report.  

Despite the absence of current proposals, Chaudhary highlighted the benefits of past amalgamations, noting significant growth in business and operational efficiency for merged entities. 

No Current Merger Proposals for Public Sector Banks 

On March 23, 2026, Pankaj Chaudhary informed the Lok Sabha that there are no merger proposals currently under consideration for PSBs.  

He emphasised that earlier amalgamations had substantially contributed to creating competitive banks with enhanced synergies and economies of scale.  

By leveraging networks, the banks have been able to access low-cost deposits and support more substantial lending operations, facilitating a noticeable expansion in their customer base and financial capacity. 

Past Amalgamation Outcomes 

Pankaj Chaudhary pointed out that previous mergers have resulted in stronger financial institutions.  

For instance, Bank of Baroda, which integrated Vijaya Bank and Dena Bank in 2019, saw its business grow from ₹16.1 lakh crore in March 2019 to ₹27 lakh crore in March 2025.  

Similarly, Punjab National Bank, after amalgamating with Oriental Bank of Commerce and United Bank of India in 2020, expanded from ₹18.3 lakh crore in March 2020 to ₹26.8 lakh crore in March 2025. 

The EASE 9.0 Reforms Agenda 

The EASE (Enhanced Access and Service Excellence) 9.0 Reforms Agenda, outlined for FY2026-27, focuses on enhancing the long-term capabilities of PSBs.  

Aiming to transform them into globally competitive banks by 2047, the agenda covers themes such as risk management, innovation, and socio-economic impact.  

Modernisation of IT systems and the promotion of AI-enabled workflows are integral to the agenda in order to improve operational risk frameworks and customer service. 

Read More: PSU Bank Stocks Rally Up to 5% as Markets Rebound; SBI, Canara Bank, PNB Lead Gains! 

RBI’s Role in Market Stability 

In a separate statement, Chaudhary spoke about the Reserve Bank of India's responsibilities in market stability. He clarified that while the value of the rupee is market-determined, the RBI intervenes during excessive volatility.  

Factors like the Dollar Index, crude prices, and capital flows influence the rupee’s exchange rate. The bank sold ₹12,350 crore in 2024 and ₹51,714 crore in 2025 to stabilise the currency amid various pressures, including heightened crude oil prices due to ongoing conflicts in West Asia. 

Conclusion 

The announcement affirms the government’s current stance on not pursuing further PSB mergers. However, the benefits witnessed from earlier amalgamations and the ongoing reforms indicate a focus on strengthening existing banking structures to enhance global competitiveness by 2047. 

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