India continues its push to create stronger public sector banks through consolidation:
- Historical mergers (2017–2020):
- SBI merged with several sarkari banks (e.g., SBP, SBH, SBM, SBP, SBT, BMB) in April 2017
- BoB + Dena + Vijaya (Apr 2019)
- Canara + Syndicate (Apr 2020)
- Indian + Allahabad (Apr 2020)
- PNB + OBC + UBI (Apr 2020)
- Union Bank + Andhra + Corporation (Apr 2020)
- These moves trimmed the number of PSU banks to 12, boosting stability and reducing government burden.
Rural Bank (RRB) Consolidation – “One State, One RRB”
Implemented May 1, 2025, aiming for efficiency and better service in rural areas:
- Karnataka Grameena Bank = Karnataka Gramin + Karnataka Vikas Grameena
- Uttar Pradesh Gramin Bank = Aryavart + Baroda UP + Prathama UP Gramin
- Madhya Pradesh Gramin Bank = existing MP Gramin + Madhyanchal Gramin
- Maharashtra Gramin Bank merged other RRBs in the state effective May 1
NBFC & Private Sector M&A
- Infinity Fincorp: Switzerland’s Partners Group acquiring a 75% stake for US $230 million
- Piramal Finance (formerly DHFL) approved a reverse merger into the parent, now rebranded as Piramal Finance Limited
Foreign Investment / Private Bank Deals
- Yes Bank: Japan’s SMBC acquiring a 20% stake for ₹13,483 crore, India’s largest foreign bank investment to date
- SMBC also plans to seek RBI approval to establish a wholly-owned subsidiary in India
- This has prompted RBI to review shareholding norms to attract more foreign capital
Past Private-Sector Mergers
- HDFC Ltd & HDFC Bank: Reverse merger completed July 2023, making it India’s largest private lender
- ICICI Bank’s earlier offer to acquire HDFC Ltd didn’t materialize, but laid the groundwork for eventual merger
Why It Matters
- PSU bank consolidation improves capital strength, reduces NPAs, and cuts overlaps
- RRB amalgamations boost rural reach and operational efficiency under the “One State, One RRB” policy
- Foreign strategic investment, like SMBC‑Yes Bank, diversifies capital, improves governance, and prompts regulatory modernization
- NBFC consolidations focus on scale, stability, and aligning with Non-Banking Financial Company (NBFC) regulation
At-a-Glance: Major Banking Consolidations in 2025
| Category | Entities Involved |
|---|---|
| PSU Banks | SBI, BoB, Canara, Indian, PNB, Union Bank (merged earlier) |
| RRBs | State-level consolidation in Karnataka, UP, MP, Maharashtra |
| NBFC/Private | Infinity Fincorp (Partners Group stake), Piramal Finance merger |
| Foreign Investment | SMBC‑Yes Bank stake, SMBC seeking bank license, RBI reviewing norms |
| Private Sector Merger | HDFC Ltd reverse-merged with HDFC Bank (completed 2023) |
