Govt eyes heft with Union Bank, BoI merger plan

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

Talks are part of reforms set rolling in 1991.

(ISTOCKPHOTO)

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.

The second largest public sector bank today is Bank of Baroda with total assets of ₹18.62 trillion as of 30 June 2025. This asset base ranks it fourth among all banks, private ones included, behind HDFC Bank and ICICI Bank. A merged Union Bank of India and Bank of India would have assets of ₹25.67 trillion, rubbing shoulders with ICICI Bank (₹26.42 trillion).