Govt Pushes Mega PSU Bank Mergers; More Large Lenders Expected by 2026

• Government initiates talks with RBI and PSBs for further consolidation to create globally competitive banks.
• Objective is to support India's growth ambitions under the Viksit Bharat 2047 vision, with Finance Minister Nirmala Sitharaman hinting at the move.
• Past mergers reduced PSBs from 27 to 12; only SBI ranks among the world's top 50 banks by assets.
• Improved profitability of PSBs (record Rs 1.78 lakh crore in FY25, projected Rs 2 lakh crore in FY26) strengthens the case for consolidation.
• Strategic stake sales (IDBI Bank) and financial sector reforms (100% FDI in insurance) are also progressing alongside merger plans.

Why It Matters: India aims for more globally competitive mega banks by 2026 through renewed PSB mergers.