Canara Bank will take over Syndicate Bank as part of the Narendra Modi government's plan to merge 10 public sector banks into four. This will make it the fourth largest public sector bank.
The government will infuse capital worth Rs 6,500 crore into Canara Bank. “... (this) will also give us better opportunities to do quality business with better consortium arrangements and controls,” the bank's Managing Director and Chief Executive Officer RA Sankara Narayanan told BloombergQuint, adding that once the bank receives approvals from the government and gazette notifications, the actual integration may happen some time in April 2020.
The total number of state-owned banks will come down to 12 from 21 once the process is completed.
The Acquirer
Canara Bank
Following the merger, the combined entity will be the fourth-largest public sector bank. The overall advances of the amalgamated bank will be around Rs 6.61 lakh crore and the deposit base will stand at approximately Rs 8.6 lakh crore.
Following the merger, the combined entity will be the fourth-largest public sector bank. The overall advances of the amalgamated bank will be around Rs 6.61 lakh crore and the deposit base will stand at approximately Rs 8.6 lakh crore.
Canara Bank had a relatively lower gross non-performing asset ratio of 8.77 percent ahead of the merger. The state-owned lender's capital adequacy ratio as on June 30 was at 11.7 percent. The lender will get Rs 6,500 crore worth capital from the government.
Bank Being Acquired
Syndicate Bank
Syndicate Bank is one of India's oldest commercial banks. Similar to other banks, it too has had its fair share of troubles. Gross NPAs for Syndicate bank stood at 11.6 percent as the end of June. The bank will be merged into Indian Bank.
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