Indian state-owned lender Allahabad Bank has approved its proposed merger with local peer Indian Bank.
The board of the bank gave its in-principle approval for the combination. The merger will create the seventh largest public-sector lender in the country.
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In a statement, Allahabad Bank said: “In terms of SEBI (listing obligations and disclosure requirements)…, the board of directors in a meeting held today has considered and accorded its in-principle approval for amalgamation of Allahabad Bank into Indian Bank.”
Headquartered in Kolkata, Allahabad Bank has around 3,245 branches across India. During the fiscal year 2017-18, the bank reported a total business of INR3.8 trillion.
Last month, the Government of India announced the consolidation of ten state-owned banks into four entities. The announcement included the combination of Allahabad Bank and Indian Bank.
The overall move is aimed at bolstering the banking sector and support government plans in creating a $5 trillion economy in the next five years.
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By GlobalDataIt included merging Oriental Bank of Commerce and United Bank with Punjab National Bank; and combining Andhra Bank and Corporation Bank with the Union Bank of India.
The plan also encompasses merging the operations of Canara Bank and Syndicate Bank. Earlier this week, Canara Bank gave its in-principle approval for this combination.
The merger of Canara Bank and Syndicate Bank will create the fourth largest public sector lender in India.
