Union Finance Minister Nirmala Sitharaman on Friday announced 10 public sector banks would be merged into four entities. This came a week after she unveiled a slew of measures to revive economic growth, which fell to a six-year-low in the April-June quarter.

The mergers will reduce the number of state-owned banks from 27 in 2017 to 12, PTI reported. This is the first such move after Narendra Modi government vowed to clean up the banking sector and reduce the number of public sector banks. “We are trying to build the NextGen banks,” Reuters quoted Sitharaman as saying.

The finance minister said Punjab National Bank, Oriental Bank of Commerce and United Bank would be merged to create the country’s second largest lender after State Bank of India. The government also announced that two lenders based in South, Canara Bank and Syndicate Bank, would be amalgamated. In addition to this, Sitharaman said Andhra Bank and Corporation Bank would be merged with Union Bank, while Indian Bank would be merged with Allahabad Bank.

Sitharaman also gave details of the government’s latest cash infusion into the state-run lenders. Punjab National Bank will have business size of Rs 17.94 lakh crore, behind SBI with a business of Rs 52.05 lakh crore. Bank of Baroda, after the merger with Vijaya Bank and Dena Bank, will become the country’s third largest bank. It has a business of Rs 16.13 lakh crore. The consolidated Canara Bank will be the fourth largest bank with business of Rs 15.2 lakh crore, followed by Union Bank of India at Rs 14.59 lakh crore. Indian Bank will be the seventh largest state-lender with business size of Rs 8.08 lakh crore after merging with Allahabad Bank.

“To make management accountable to board, the board committee of nationalised banks will appraise the performance of general managers and above, including managing directors,” Sitharaman said.

The finance minister said the banks would be provided adequate capital. “The infusion is primarily aimed at giving a boost to the economy,” she added.

Financial Services Secretary Rajiv Kumar announced that there would be no retrenchment in any of the banks. “Rather employee benefits and human resource conditions will improve,” he said. “Best practices will be followed. We will especially ensure that no employee is negatively affected because of this.”

He said the move would not cause any disruption in the economy. “This is exactly the right time for these consolidations,” Kumar assured. “This will not cause any disruption because anchor banks will draw from their experience. The synergy will boost the economy and provide great stability.”

Last week, Sitharaman had announced a set of measures to prop up the economy, less than two months after presenting the Union Budget. The Reserve Bank of India had also announced last week that it would give the Centre Rs 1.76 lakh crore of its dividend and surplus reserves.

Last year, the government had merged Dena Bank and Vijaya Bank with Bank of Baroda, creating the third-largest bank in terms of loans in the country.

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