India’s finance minister Nirmala Sitharaman says that the planned public sector bank consolidation will go live on 1 April.

Specifically, ten state-run banks will become four as part of a long awaited public sector bank consolidation.

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The aim forms part of the government plans to create a $5trn economy.

The government argues that public sector bank consolidation means improved operational efficiency. Moreover, by lowering their costs, the banks will be able to lower their lending rates. Furthermore, this will help revive the local economy and boost credit growth.

Once the latest mergers take place there will be 12 state-run banks in India, down from 27 in 2017.

Public sector bank consolidation: the players

Punjab National Bank (PNB) will merge with United Bank of India and Oriental Bank of Commerce. PNB currently serves over 100 million customers via a network of 6,900 branches. Meantime, United Bank of India, nationalised in 1969 operates a network of almost 2,000 outlets. Oriental Bank of Commerce, nationalised in 1980, runs a network of 2,390 branches.

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The second major public sector merger involves Syndicate Bank and Canara Bank. Syndicate Bank runs a network of 4,063 outlets while Canara operates 6,333 branches. The combination of Syndicate and Canara will form the fourth-largest public sector bank in India.

Next up is the merger of Allahabad Bank and Indian Bank.

Allahabad Bank currently operates around 3,250 branches across India while Indian Bank runs 2,872 domestic outlets.

The final merger involves Andhra Bank and Corporation Bank to be consolidated with Union Bank of India.

Founded in 1919 in Bombay, now Mumbai, Union Bank currently operates 4,200 branches. Meantime, Andhra Bank runs a network of 2,876 branches. Mangalore-headquartered Corporation Bank operates a network of 2,432 branches. As a result, the enlarged Union Bank will become the fifth-largest public sector bank in the country.