5.25 pm: Rajeev Kumar says the Rs 70,000 crore bank recapitalisation plan is yet to be assessed by the boards of the public sector banks.

5.21 pm: Finance Secretary Rajeev Kumar says “there is no chance of retrenchment”. “The benefits of employment and human resources will improve, with amalgamation the best combination will be taken up,” ANI quotes him as saying.

5.20 pm: Nirmala Sitharaman refuses to comment on Congress’s remarks on bank frauds. “If bank frauds became an assumption for the Indian citizen it is because of the Congress party,” ANI quotes her as saying. “Many of these fugitives we are trying to get back were encouraged during their time.”

4.58 pm: Nirmala Sitharman spells out the recapitalisation plan to help the public sector banks grow. PNB will get Rs 16,000 crore, Union Bank of India Rs 11,700 crore, Bank of Baroda will receive Rs 7,000 crore, Canara Bank will get Rs 6,500 crore, and Indian Bank Rs 2,500 crore.

4.55 pm: The finance minister says the government wants to “bring strength to positions of non-official directors”. Their role will be analogous to independent directors, she adds.

4.54 pm: Boards are being given the mandate to reduce or rationalise board committees, says finance minister. “Risk management committee will have the mandate to fix accountability for compliance of risk appetite framework,” Sithraman adds.

4.48 pm: The boards of the public sector banks will decide on a system of individual development plan for all senior executive positions, says Nirmala Sitharaman.

4.47 pm: Finance Secretary Rajeev Kumar tweets a detailed list of all the bank mergers.

4.46 pm: The finance minister announces governance reforms in public sector banks. The board committee of nationalised banks will appraise the performance of general managers and officials above that level, including the managing director. “Boards will be given flexibility to introduce CGM-level officials as per business needs,” she adds.

4.45 pm: With these mergers, there will be 12 public sector banks in the country as against 27 in 2017, the finance minister points out.

4.41 pm: Union Bank of India will be merged with Andhra Bank and Corporation Bank to become the fifth-largest public sector bank in terms of business, says finance minister. “Canara Bank will be merged with Syndicate Bank,” she adds. “It will become the fourth-largest public sector bank with business of Rs 15.2 lakh crore.”

4.39 pm: The finance minister says Indian Bank will be merged with Allahabad Bank.

4.38 pm: The merged bank will have business of Rs 17.95 lakh crore. “It will have the second largest branch network in India, with 11,437 branches,” Sitharaman adds. “The CASA ratio of the amalgamated bank will be 40.52%. We are following RBI guidelines and Basel norms.”

4.33 pm: Punjab National Bank, Oriental Bank of Commerce and United Bank will be merged, announces Sitharaman. The merged entity will become the country’s second largest public sector bank.

4.31 pm: The growth in current accounts and saving accounts, or CASA growth, was robust after the merger of the banks, Sitharaman says. “There was a 6.9% increase in June 2019 compared to June 2018,” she adds. Retail loans increased 20.5% in June 2019 compared to the same period last year.

4.29 pm: The finance minister says employees were not retrenched after the merger of Bank of Baroda, Vijaya Bank and Dena Bank.

4.27 pm: Gross non-performing assets stand at 7.9% in finanicial year 2019 compared to 8.65% the year before. The highest provision coverage ratio has occurred in seven years in the financial year 2019 at 75.3%, Sitharaman says. Specialised agencies have been set up to monitor loans over Rs 250 crore.

4.24 pm: Nirmala SItharaman says loan recovery has reached record levels. “In financial year 2018-’19, Rs 77,563 crore was collected, now it has crossed Rs 1.21 lakh crore,” she adds.

4.23 pm: SWIFT messages are linked to the central banking system to prevent Nirav Modi-like situations, says finance minister. SWIFT, or Society for Worldwide Interbank Financial Telecommunication, is an internationally recognised identification code for banks around the world.

4.21 pm: The press conference can be followed in the link below:

Play

4.18 pm: Finance Minister Nirmala Sitharaman starts addressing the media. “We need to lay a strong foundation for the financial sector, but also make sure that we give banks a good governance model.”

3.59 pm: If announced, this will be the third big merger under Narendra Modi government. In 2017, five associate banks and Bharatiya Mahila Bank were merged with the State Bank of India. Earlier this year, Dena Bank and Vijaya Bank merged with Bank of Baroda. The new entity came into force on April 1. In the first quarter of the 2019-’20 financial year, the net profit of Bank of Baroda increased 34% to Rs 710 crore.

3.59 pm: Some media reports suggest that Sitharaman may announce merger of multiple sets of public sector banks.

3.50 pm: A report in the Business Standard said, quoting unidentified officials, says that the chief executives of 10 banks were called for a meeting on Friday. The banks that were invited for consultations were Union Bank of India, Canara Bank, Punjab National Bank, United Bank, Oriental Bank of Commerce, United Bank, Allahabad Bank, Corporation Bank, Syndicate Bank and Andhra Bank.

3.48 pm: There have been fears of an economic slowdown after India’s Gross Domestic Product growth rate touched a five-year low of 5.8% in the last quarter of 2018-’19. United States-based financial services company Moody’s last week downgraded India’s projected GDP Product growth rate to 6.2% for 2019-’20.

Last week, Sitharaman had announced a slew of measures to boost the economy, less than two months after presenting the Union Budget.

Now, follow and debate the day’s most significant stories on Scroll Exchange.