PNB, BoI, Union Bank shares fall 5% amid merger buzz

NEW DELHI: Shares of Punjab National Bank (PNB), Bank of India (BoI) and Union Bank of India declined over 5 per cent each in Tuesday's session amid reports that the government is planning a second round of merger in public sector banks.

As per an ET report, the government is soon likely to invite select lenders, including PNB, BoI and Union Bank of India, for discussion on the second round of merger in public sector banks, according to a finance ministry official.

In October 2018, the government had proposed the merger of Bank of Baroda, Vijaya Bank and Dena Bank to create the country’s third-biggest lender through the alternate mechanism. Both Vijaya and Dena were amalgamated with BoB on April 1, 2019.


The report quoted a senior executive with a PSU bank saying that merger is not the antidote for every banking woe. The government should not force mergers only to create too-big-to-fail structures.

Shares of Union Bank of India, BoI and PNB closed 5.51 per cent, 4.18 per cent and 3.75 per cent lower, respectively, on BSE.