The recent bank merger was one of the most innovative things that happened in the world. Due to the decrease in GDP and economic crash, the bank merging system became a vital thing.
The main objective of the bank merger was to benefit citizens of the country due to the decreased rate of interest and the strong presence of banks. Also With the recent bank merger, it was expected that the economy of the country would get stable. The following part of the article would describe the advantages and statistics of the bank mergers.
Bank Mergers Objective
According to the recent news of the bank merger, it was announced that there would be a big consolidation of public sector banks. The consolidation was made to proceed step by step. In the recent step, the top 10 public sector banks were supposed to get merged into 4 banks.
The main rationale of the merger was that there would not be any disruption to the customers as the banks which are to be merged will get operated on the same technological platform to diminish chaos because each bank had their own set of platforms and use. So banks with common operations were merged.
Merged Bank and Advantages
The very famous bank which is State Bank of India had its agency ( State bank of Patiala, State Bank of Hyderabad, State Bank of Mysore). Vijaya Bank and Dena Bank were merged into Bank of Baroda.
Now as per the merger, they all will be categorized under State Bank of India and that would maintain stability in the country. The first and foremost listed advantage was that with the bank merger the cost of lending will get reduced. The next main advantage was to build banks as Next-Gen banks.
The motive was to make banks smarter to use. The capacity of the will get enhanced as the number of employees would increase in the banks and tasks would be performed efficiently.
The bank merger has been a great boon as far as mankind is concerned because earlier it was found that each bank was required to have a different budget to maintain its banks. But with the merger, a single bank would be operated and hence the cost of maintenance would decrease.
Also, the minimal cost of lending would help people in maintaining their living and things would shape much better for them.