Recomended Merger of Bank in comming future

out of 12 Public sector banks in India, combination of banks most suitable to merger into 3 big banks from 12 now

The most suitable combination to merge the 12 public sector banks in India into 3 big banks would group them based on size, reach, and compatibility, maximizing their combined branch networks and financial strengths[1][2]. Below is a recommended merger structure based on market capitalisation, branch network, and government reform trends[3][4][5]:

### Recommended Merger Groups

#### Group 1: SBI-led Mega Bank
- State Bank of India (SBI)
- Bank of Maharashtra
- Central Bank of India
- UCO Bank

This group combines SBI’s existing dominance with banks that have a significant presence but are not among the top five by market cap. SBI, already the largest, can absorb these banks, yielding a strong pan-India reach with the highest total assets and branches[1][4][5].

#### Group 2: PNB + BoB Led North-Western Bloc
- Punjab National Bank (PNB)
- Bank of Baroda (BoB)
- Punjab & Sind Bank
- Indian Overseas Bank

This combination leverages PNB and BoB, the next biggest after SBI, and brings together banks with strong north-west and southern regional franchises, making the merged entity robust in both financials and geography[1][5].

#### Group 3: Canara + Union + Indian + Bank of India South-East Bloc
- Canara Bank
- Union Bank of India
- Indian Bank
- Bank of India

These banks, already large in market cap and branch network, would create a well-aligned entity strong in south and east India with potential to scale digitally and expand their footprint nationwide[1][5].

### Rationale for These Groups
- Maximizes operational synergy by combining banks with complementing geographical strengths.
- Ensures only strong banks combine with banks having weaker financials, minimizing risk concentration[4].
- Follows government aim for ‘banks of scale’ to increase global competitiveness and reduce fragmented management costs[6][7].
- Offers diversity in customer base, branch network, and product portfolio, essential for creating large, resilient banks.

### List of Current PSU Banks (2025)

| Bank Name                | Market Cap (₹ Cr) | Branches       |
|--------------------------|------------------|----------------------|
| State Bank of India (SBI)| 6,67,695         | 22,740 [1]       |
| Punjab National Bank     | 1,14,608         | 10,168 [1]       |
| Bank of Baroda           | 1,13,620         | 8,356 [1]        |
| Union Bank of India      | 91,122           | 8,572 [1]        |
| Canara Bank              | 86,044           | 9,816 [1]        |
| Indian Bank              | 73,800           | 5,877 [1]        |
| UCO Bank                 | 50,753           | 3,263 [1]        |
| Bank of India            | 49,000           | 5,202 [1]        |
| Central Bank of India    | 44,351           | 4,541 [1]        |
| Bank of Maharashtra      | 39,242           | 2,551 [1]        |
| Indian Overseas Bank     | ---              | --- [1][5]  |
| Punjab & Sind Bank       | ---              | --- [1][5]  |

This strategic combination would help create three globally competitive Indian public sector banks capable of driving economic growth and supporting the next wave of banking reforms[5][7].

Citations:
[1] List of Government Banks in India 2025 https://www.mymudra.com/blog/list-of-government-banks-in-india-2025
[2] List of Government Banks in India​ 2025 https://lakshmishree.com/blog/government-banks-in-india/
[3] Bank Merger List in India 2025, Complete List https://www.oliveboard.in/blog/bank-merger-list/
[4] Latest List of Merger of Banks in India https://groww.in/p/savings-schemes/banking-mergers-in-india
[5] Government Banks in India 2025 PDF: Top 10, Public ... https://guidely.in/blog/government-banks-in-india