The Government of India has asked IDBI Bank and United Bank to draw a blueprint for their merger, with an aim to boost efficiency.
Sources familiar with the matter were quoted by The Times of India as saying that the merger of United Bank of India with IDBI Bank would be perfect, as the latter has a weak presence in the eastern part of the country where UBI has a strong branch network.
In addition, IDBI’s weak retail network could get a boost with the Kolkata-headquartered United Bank.
Both banks also use same software, Infosys’ Finacle, which will make the merger easier, according to the publication.
However, the Indian government is expected to first integrate State Bank of India and State Bank of Patiala, before initiating IDBI Bank and United Bank merger.
Following merger of State Bank of Saurashtra in 2008 and State Bank of Indore in 2010, the parent company SBI will gradually integrate all its remaining five subsidies to create India’s mega bank. The five SBI subsidies include State Bank of Hyderabad, State Bank of Mysore, State Bank of Travancore, State Bank of Bikaner and Jaipur and State Bank of Patial.

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By GlobalDataFinance Minister Arun Jaitley in his Budget speech had said, "There have been some suggestions for consolidation of Public Sector Banks. Government, in principle, agrees to consider these suggestions."