LARGE PUBLIC SECTOR BANKS MAY KICK-OFF MERGERS

As per the report appearing in The Economic Times, consolidation in the banking sector space might begin with large banks in which the Government holding is close to 51%. At present, the law bars government holding in Public Sector Banks falling below 51%. The Government's recent move to provide additional capital to these banks will help to meet their fund requirements upto 2012.
An Official said that the Government could start the consolidation process with banks in which its holding was close to the 51% floor. As of now, Government holds less than 55% share in six public sector banks - OBC, Dena Bank, Andhra Bank, BOB, IDBI and Vijaya Bank. In four banks - Allahabad Bank, UBI, Corporation Bank and PNB, Government holding is between 55 and 60%.
It is also reported that the Government was in the process of identifying potential merger targets, following which a framework would be laid down.
Source: http://www.business-standard.com/india/news/large-public-sector-banks-may-kick-off-mergers/376417/