Union Bank, Bank of India Merger: Second Largest PSU Bank by Year-End?

• Preparations are intensifying for the potential merger of Union Bank of India and Bank of India, aiming to create the country's second-largest PSU bank.
• The merger process, including internal review and due diligence, is expected to conclude by the end of the current calendar year.
• The government's strategy is to consolidate smaller PSU banks into 4-5 larger, stronger entities to enhance operational effectiveness and lending capacity.
• Post-merger, the combined entity could have total assets of approximately 25.4 lakh crore rupees, making it the third-largest bank overall after SBI and HDFC Bank.
• Key challenges include integrating disparate technology platforms and harmonizing employee operations, though both banks' strong asset quality provides a solid foundation.

Why It Matters: Union Bank and Bank of India's potential merger could create India's second-largest PSU bank by year-end.