In the last ten years, mergers and acquisitions have been the main drivers of big changes in the Indian banking sector. The goal of these strategic mergers is to improve banks' working efficiency, make their finances stronger, and help them reach more customers. Combining their resources can make banks more competitive, help them grow, and let them offer more services to more people of all kinds. We will look at a list of important bank mergers in India, go into more detail about one major merger and talk about how these mergers have changed the banking sector.
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List of Notable Bank Mergers in India
In the past few years, there has been a lot of growth in the Indian banking sector. This has mostly happened through mergers, which are meant to make financial institutions stronger and more efficient. Here is a list of important Indian bank mergers
State Bank of India (SBI) Merger with Associate Banks and Bharatiya Mahila Bank (2017)
Merged Banks: State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore, and Bharatiya Mahila Bank.
Objective: To create a more robust and competitive banking entity with expanded market reach and operational efficiency.
Bank of Baroda, Dena Bank, and Vijaya Bank Merger (2019)
Merged Banks: Dena Bank and Vijaya Bank with Bank of Baroda.
Objective: To create third-largest public sector bank with improved financial strength, profitability and a larger customer base of India.
Learn the Key Differences Between Merger and Acquisition
Public Sector Bank Mergers (2020)
Merged Banks:
Punjab National Bank merged with Oriental Bank of Commerce and United Bank of India.
Canara Bank merged with Syndicate Bank.
Union Bank of India merged with Andhra Bank and Corporation Bank.
Indian Bank merged with Allahabad Bank.
Objective: To streamline operations, enhance financial stability, and increase market share for each of these banks.
HDFC Ltd. and HDFC Bank Merger (2022)
Merged Entity: Housing Development Finance Corporation (HDFC) Ltd. merged with HDFC Bank.
Objective: To combine HDFC's housing finance operations with the banking services of HDFC Bank, creating a diversified financial institution with a wider range of products.
What are the Types of Mergers?
ICICI Bank and Bank of Madura Merger (2001)
Merged Bank: Bank of Madura with ICICI Bank.
Objective: To expand ICICI Bank’s reach in southern India and enhance its retail banking services.
Kotak Mahindra Bank and ING Vysya Bank Merger (2015)
Merged Bank: ING Vysya Bank with Kotak Mahindra Bank.
Objective: To strengthen Kotak Mahindra Bank’s market position, expand its customer base, and diversify its portfolio.
DBS Bank and Lakshmi Vilas Bank Merger (2020)
Merged Bank: Lakshmi Vilas Bank with DBS Bank India.
Objective: To enhance DBS Bank’s presence in India by absorbing a struggling regional player.
IDFC Bank and Capital First Merger (2018)
Merged Entity: IDFC Bank merged with Capital First to form IDFC First Bank.
Objective: To expand its retail banking operations and improve market competitiveness.
Checkout the Recent Mergers and Acquisitions in India
Detailed Case Study
India has merged its banks in order to make the economy more stable, serve more customers, and run its businesses more efficiently. Here are in-depth case studies of some of the most important bank mergers that have changed the Indian banking landscape:
Merger of Bank of Baroda, Dena Bank, and Vijaya Bank (2019)
The Bank of Baroda (BoB) joined with Dena Bank and Vijaya Bank in April 2019, making it India's third-largest public sector bank. The goal of this merger was to make the banks stronger in the market, improve customer service and make the finances more stable. The integration process was mainly about making sure that operations ran smoothly, that company cultures were in sync and that branch networks were set up in the best way possible to serve a wider range of customers. The successful merger demonstrated the potential of consolidation to build robust financial institutions capable of competing globally.
Merger of State Bank of India (SBI) with Its Associate Banks and Bharatiya Mahila Bank (2017)
Bharatiya Mahila Bank joined SBI and its five other banks in April 2017. These banks were the State Bank of Bikaner and Jaipur, the State Bank of Hyderabad, the State Bank of Mysore, the State Bank of Patiala and the State Bank of Travancore. The goal of this merging was to make a banking company that was more efficient, competitive, had more customers and was financially stronger. Aligning policies, standardizing procedures and harmonizing technology systems were all parts of the integration process. The merger put SBI in the top 50 global banks by asset size which made it much better able to serve a wide range of customers.
Merger of Kotak Mahindra Bank and ING Vysya Bank (2015)
Back in April 2015, Kotak Mahindra Bank and ING Vysya Bank merged to form a bigger banking group with a wider range of customers. The main goals of the merger were to join operations, make sure that the philosophies of the two companies were the same and use synergies to make both operations and customer service better. This showed how companies that merged could use each other's skills to do well in the tough world of banking. In 2000 HDFC Bank and Times Bank joined together.
Merger of HDFC Bank and Times Bank (2000)
The first voluntary merger in India's banking sector happened when HDFC Bank merged with Times Bank in February 2000. The goal of this business move was to increase HDFC Bank's customer base, improve its branch network, and make the bank stronger in the market. As part of the integration process, banking operations had to be matched up, technology systems had to work well together and customer service procedures had to be standardized. In the Indian banking business, the merger set a standard for banks to merge on their own. It also showed how smart mergers can help companies grow and get better at what they do.
Merger of ICICI Bank and Bank of Madura (2001)
It was in 2001 that ICICI Bank combined with Bank of Madura to make itself stronger in South India and get more customers. The main goals of the merger were to combine banking operations, make company cultures more similar and improve branch networks. This merger showed how merging companies could use the skills of their regional areas to help the country grow.
Merger of Union Bank of India, Andhra Bank, and Corporation Bank (2020)
The fifth-largest public sector bank in India was made when Union Bank of India joined with Andhra Bank and Corporation Bank in April 2020. The goal of the merger was to make operations more efficient, bring in more customers, and make the finances more stable. In order to integrate, policies had to be matched up, technology platforms had to be matched up and branch networks had to be optimized so that they could serve a wider range of customers better. This merger made clear the important role that strategic mergers play in improving banks' market situations and operational skills.
Know the Detailed Steps Involved In Merger and Acquisition Process
To Sum Up
The mergers and acquisitions in the Indian banking sector have changed the financial scene in a big way, making companies stronger and more competitive so they can handle challenges around the world. These planned mergers between banks have shown that using synergies between them can be helpful, whether the goal is to increase market share, make the financial system more stable or make operations more efficient. By combining resources, making sure that technology systems are aligned and improving branch networks, the new companies can better serve more customers and adapt to the changing needs of the financial industry. In the end these mergers have not only made individual banks stronger but they have also helped India's banking sector grow and become more modern.
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List of Merger of Banks in India: FAQs
Q1. Why do bank mergers take place in India?
Bank mergers try to strengthen the banks, make them more efficient, and be able to serve more consumers so they can compete internationally.
Q2. Which banks participated in the SBI merger in 2017?
State Bank of India was consolidated with five of its associate banks, i.e., State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore. It was also consolidated with Bharatiya Mahila Bank.
Q3. How did the 2019 Bank of Baroda merger impact the banking industry?
The consolidation of Bank of Baroda with Dena Bank and Vijaya Bank brought India's third-largest public sector bank under one umbrella, strengthening its financial position and customer base.
Q4. What was the fate of the HDFC Ltd. and HDFC Bank merger in 2022?
The merger brought the housing finance business of HDFC together with the banking business of HDFC Bank. This resulted in a diversified financial company with increased products.
Q5. Which banks merged under 2020 public sector bank mergers?
Punjab National Bank merged with Oriental Bank of Commerce and United Bank of India. Canara Bank merged with Syndicate Bank. Indian Bank merged with Allahabad Bank. Union Bank of India merged with Andhra Bank and Corporation Bank.
