After nudging State Bank of India, the country’s largest lender, to consider a merger with its five associate banks, the government may now look at combining three other state-run lenders — UCO Bank, Bank of India and Indian Overseas Bank — with stronger entities. “There have been some discussions on the merger of these three weak banks with more financially sound lenders.
Various options have been discussed,” said a finmin official, who did not wish to be identified. The official clarified that the discussions are in an exploratory stage, reiterating the stand that any consolidation proposal has to come from the banks and that the government will act only as a facilitator. Earlier this month, ET had reported that the government would prod SBI to kick-start the merger process with associate banks. SBI announced on Tuesday its intent to amalgamate them and Bharatiya Mahila Bank.