India’s banking sector has undergone major consolidation over the last three decades. These bank mergers aim to create stronger, technologically advanced, globally competitive banks capable of supporting India’s economic growth, credit expansion, and financial inclusion goals.
From public sector bank (PSB) mergers to large private-bank acquisitions, the Indian banking landscape has consistently evolved to improve efficiency, governance, risk management, and customer service. This complete Bank Merger List (1993–2025) is extremely important for aspirants preparing for Bank, SSC, UPSC, Insurance, and other government exams.
Bank Merger News 2025 (Latest Update)
In 2025, the Government of India announced that no new PSB mergers will be initiated in the immediate term. Instead, the focus is on:
- Organic growth
- AI-driven modernization
- Strengthening governance
- Global expansion of Indian banks
Currently, SBI is the only Indian PSB in the world’s top 50 banks (ranked 47). The government aims to bring two more PSBs into the top 20 globally by improving oversight and operational performance.
This shift signals a move away from frequent consolidations and toward independent strengthening of each PSB especially in agriculture, MSME lending, and rural credit.
Bank Merger India 2025: Major Reshuffle Expected
While no mergers will occur immediately, a future mega-merger plan is still under review. According to policy discussions:
Possible Banks for Merger (Proposal):
- UCO Bank
- Central Bank of India (CBI)
- Indian Overseas Bank (IOB)
- Bank of Maharashtra (BoM)
These may be merged with larger PSBs like:
- Bank of India (BoI)
- Punjab National Bank (PNB)
- Bank of Baroda (BoB)
- State Bank of India (SBI)
Expected Outcomes:
- PSB count may reduce from 12 to just 4 major banks.
- Customers may receive new IFSC codes, cheque books, and debit cards.
- NITI Aayog recommends merging or privatizing small PSBs to create stronger institutions.
Note: Final decisions are likely in FY27 after Cabinet and PMO review.
Complete Bank Merger List in India (1993–2025)
India has witnessed several key mergers over the last three decades, aimed at strengthening the banking system, improving capital adequacy, and enhancing operational efficiency. The following timeline gives a clear year-wise view of major mergers from 1993 to 2025.
| Acquiring Bank | Acquired Bank(s) | Year |
| Punjab National Bank | New Bank of India | 1993 |
| Bank of India | Bank of Karad Ltd | 1995 |
| SBI | Kashinath State Bank | 1996 |
| OBC | Punjab Co-op Bank | 1997 |
| OBC | Bari Doab Bank | 1999 |
| Union Bank of India | Sikkim Bank | 1999 |
| Bank of Baroda | Bareilly Co-op Bank | 1999 |
| HDFC Bank | Times Bank | 2000 |
| ICICI Bank | Bank of Madura | 2001 |
| ICICI Bank | ICICI Ltd (reverse merger) | 2002 |
| Bank of Baroda | Banaras State Bank | 2002 |
| PNB | Nedungadi Bank | 2003 |
| OBC | Global Trust Bank | 2004 |
| Bank of Baroda | South Gujarat Local Area Bank | 2004 |
| Bank of Punjab | Centurion Bank | 2005 |
| IDBI Bank | United Western Bank | 2006 |
| Centurion Bank of Punjab | Lord Krishna Bank | 2006 |
| Indian Overseas Bank | Bharat Overseas Bank | 2007 |
| ICICI Bank | Sangli Bank | 2007 |
| HDFC Bank | Centurion Bank of Punjab | 2008 |
| ICICI Bank | Bank of Rajasthan | 2010 |
| Kotak Mahindra Bank | ING Vysya Bank | 2014 |
| SBI | BMB + SBBJ + SBH + SBM + SBP + SBT | 2017 |
| IDFC Bank | Capital First (IDFC First Bank) | 2018 |
| Bank of Baroda | Dena Bank & Vijaya Bank | 2019 |
| PNB | OBC & United Bank | 2019 |
| Canara Bank | Syndicate Bank | 2019 |
| Union Bank of India | Andhra Bank & Corporation Bank | 2019 |
| Indian Bank | Allahabad Bank | 2019 |
| DBS Bank India | Lakshmi Vilas Bank | 2020 |
| HDFC Ltd | HDFC Bank | 2022, 2023 |
Recent Bank Mergers in India
India’s banking landscape has undergone significant restructuring through a series of major mergers in recent years. These consolidations strengthened financial stability, reduced duplication, and enhanced banks’ operational scale. Below is a quick year-wise summary of the most important mergers.
2023 – HDFC Ltd. Merged with HDFC Bank
On July 1, 2023, Housing Development Finance Corporation (HDFC) Ltd. merged with HDFC Bank in a landmark $40 billion deal.
2022 – HDFC Ltd. Merged with HDFC Bank
To further diversify its offerings and strengthen financial operations, Housing Development Finance Corporation (HDFC) Ltd. merged with HDFC Bank.
- Merged Entities: HDFC Ltd. with HDFC Bank
- Objective: To integrate housing finance operations with banking services, thus forming a large, diversified financial conglomerate with extensive retail and wholesale capabilities.
2020—Major PSU Bank Mergers Initiated by the Government
This marked a landmark consolidation of 10 public sector banks into four anchor banks to improve governance, asset quality, and scalability.
- Punjab National Bank (PNB) merged with Oriental Bank of Commerce and United Bank of India
- Objective: To make PNB the second-largest PSU bank in India with enhanced financial strength and operational reach.
- Canara Bank absorbed Syndicate Bank
- Objective: To create the fourth-largest public sector bank with complementary geographic reach and cultural alignment.
- Union Bank of India merged with Andhra Bank and Corporation Bank
- Objective: To enhance scale, increase capital base, and create a more competitive banking entity.
- Indian Bank merged with Allahabad Bank
- Objective: To form a strong entity with better provisioning coverage, asset quality, and extensive outreach.
- DBS Bank India merged with Lakshmi Vilas Bank
- Objective: To protect depositors of the struggling Lakshmi Vilas Bank and expand DBS’s footprint in India.
Following these mergers, the number of public sector banks in India was reduced to 12, with six anchor banks and six continuing as independent entities.
2019—Merger of Bank of Baroda, Dena Bank, and Vijaya Bank
This was India’s first three-way bank merger, making Bank of Baroda the third-largest PSU bank at the time.
- Merged Entities: Dena Bank and Vijaya Bank with Bank of Baroda
- Objective: To combine complementary strengths, streamline operations, and expand the customer base across regions.
2018 – IDFC Bank Merged with Capital First
To increase its presence in retail banking, IDFC Bank merged with a non-banking financial company, Capital First.
- Merged Entities: IDFC Bank and Capital First formed IDFC First Bank
- Objective: To leverage Capital First’s retail lending expertise and IDFC’s infrastructure to enhance financial inclusion.
2017 – Merger of SBI with Its Associates and Bharatiya Mahila Bank
A major step in consolidating India’s largest bank, SBI merged with its associate banks and Bharatiya Mahila Bank.
- Merged Entities:
- State Bank of Bikaner and Jaipur
- State Bank of Hyderabad
- State Bank of Mysore
- State Bank of Patiala
- State Bank of Travancore
- Bharatiya Mahila Bank
- Objective: To enhance SBI’s global competitiveness, expand its footprint, and reduce operational duplication, thus positioning it among the world’s top 50 banks by assets.
2015 – Kotak Mahindra Bank Merged with ING Vysya Bank
To strengthen its position and scale, Kotak Mahindra Bank merged with ING Vysya Bank in one of the largest private sector bank mergers.
- Merged Entities: ING Vysya Bank with Kotak Mahindra Bank
- Objective: To expand geographical presence, customer base, and product offerings while integrating operations effectively.
2001 – ICICI Bank Merged with Bank of Madura
This early merger helped ICICI Bank rapidly expand its presence in South India and improve its retail portfolio.
- Merged Entities: Bank of Madura with ICICI Bank
- Objective: To strengthen ICICI’s footprint in southern regions and increase retail and SME banking capabilities.
2000 – HDFC Bank Merged with Times Bank
India’s first voluntary bank merger, this set the tone for future consolidations in the sector.
- Merged Entities: Times Bank with HDFC Bank
- Objective: To expand HDFC Bank’s branch network, customer base, and operational scale.
Objectives of Bank Mergers in India
Bank mergers are executed to:
- Increase financial strength and capital base
- Reduce NPAs via pooled assets and governance
- Improve efficiency by reducing duplicate branches
- Strengthen global competitiveness
- Expand reach to rural and semi-urban areas
- Enhance digital and technological integration
Benefits of Bank Mergers
Bank mergers provide several structural advantages that help institutions operate more efficiently and competitively. They enhance a bank’s ability to scale, improve service delivery, and build financial resilience. Below are some of the key benefits:
- Improved operational efficiency through shared systems, reduced duplication, and integrated management.
- Higher credit capacity as stronger capital bases support large infrastructure and corporate lending.
- Better risk diversification with a wider loan portfolio and more stable asset quality.
- Enhanced global competitiveness as larger banks can operate at international standards.
- Reduction in NPAs through stronger governance and better monitoring mechanisms.
Challenges of Bank Mergers
Despite their advantages, bank mergers come with several operational and managerial challenges. These issues need strategic handling to prevent disruptions and ensure a smooth transition. Key challenges include:
- Cultural integration difficulties where different work environments require time to align.
- Complex core banking and technology synchronization that may temporarily impact services.
- HR-related challenges such as redeployment, surplus staff handling, and retraining requirements.
- Temporary impact on customer service during account migration and system updates.
Impact of Bank Mergers
Bank mergers significantly influence the functioning and performance of the banking sector.
- Improved capital base enhances credit flow to priority sectors.
- Reduced operational costs through branch rationalization and process integration.
- Wider adoption of technology improves service quality and turnaround time.
- Greater risk diversification stabilizes financial performance.
- Short-term transitional challenges may include IT migration, staff alignment, and customer updates.
PSU Bank Merger
Public Sector Bank mergers were introduced to create fewer but stronger government-owned banks with better financial stability. These consolidations helped reduce NPAs, improve capital adequacy, and streamline operations.
- Major PSU mergers included PNB with OBC & UBI, Canara with Syndicate, and Indian Bank with Allahabad Bank.
- The total number of PSBs reduced drastically from 27 to just 12.
- The goal was to create large, technology-driven banks capable of supporting India’s credit demand and economic growth.
FAQs
Q1: What is the latest update on bank mergers in India for 2025?
A1: The government has clarified that no new PSU bank mergers will take place in 2025, and the focus will be on organic growth, technology upgrades, and stronger governance.
Q2: Why does the government merge public sector banks?
A2: PSU banks are merged to strengthen financial stability, increase capital, reduce duplication, and improve overall operational efficiency.
Q3: Will customers get new IFSC codes after a bank merger?
A3: Yes, after a merger, customers may receive new IFSC codes, cheque books, debit cards, and account updates.
Q4: How do bank mergers improve credit flow in the economy?
A4: Larger merged banks have stronger capital bases, allowing them to lend more to MSMEs, agriculture, and infrastructure sectors.
Q5: Are only public sector banks merged in India?
A5: No, private banks also undergo mergers. Examples include HDFC Bank with HDFC Ltd and Kotak Mahindra Bank with ING Vysya Bank.
Q6: How did SBI become one of the world’s top 50 banks?
A6: SBI entered the global top 50 after merging with its associate banks and Bharatiya Mahila Bank in 2017.
Q7: How many public sector banks are there in India after recent mergers?
A7: After the 2020 mega mergers, the number of PSBs reduced from 27 to 12.
Q8: What was the impact of the HDFC Ltd–HDFC Bank merger?
A8: The merger created one of India’s largest financial groups, strengthening housing finance, retail banking, and capital operations.
Q9: Do mergers affect banking services for customers?
A9: Yes, customers may face temporary disruptions during system integration and digital platform updates.
Q10: Do merged banks offer better digital services?
A10: Yes, merged banks generally upgrade their mobile banking, online banking, and cybersecurity systems.
Q11: How do mergers reduce operational costs for banks?
A11: Mergers eliminate duplicate branches, unify operations, and streamline management, reducing overhead expenses.
Q12: Why are smaller PSBs recommended for mergers or privatization?
A12: Smaller PSBs with low capital or high NPAs are often recommended for consolidation to improve financial stability.
Q13: Why did DBS Bank India acquire Lakshmi Vilas Bank?
A13: DBS acquired LVB in 2020 to protect depositors and stabilize the financially distressed bank.
Q14: How do bank mergers help Indian banks expand globally?
A14: Mergers create large, capital-strong banks capable of competing internationally and adopting advanced technologies.
Q15: When will the next round of bank mergers take place?
A15: No timeline has been finalized. Discussions suggest possible decisions in FY27 after Cabinet and PMO review.
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