Govt weighs Union Bank-BoI merger to form new No. 2 bank

The government is drawing up a fresh blueprint to merge select public sector banks, said three people aware of the matter, as it aims to scale up such lenders and streamline overlapping operations under banking sector reforms planned over the next few years.

- Subhash Narayan

The discussions at the finance ministry are around a merger of Union Bank of India and Bank of India, both headquartered in Mumbai, said the first person mentioned above. If the merger goes through, it will create a state-run lender ranked second only after the country's top bank by assets, State Bank of India.