Merger of Two Major Public Sector Banks Approved by Cabinet
The Union Cabinet has approved the merger of two prominent Public Sector Banks (PSBs) to create a 'Global Sized' banking entity.
2-Minute Summary (TL;DR)
- Cabinet approves merger of two major Public Sector Banks.
- Aims to create 'Global Sized' banks with higher efficiency.
- Consolidation helps in better NPA management and capital utilization.
- Part of the ongoing banking reforms initiated by the government.
How This Topic is Tested in Competitive Exams
| Exam | Frequency | Approx. Marks | What Gets Asked |
|---|---|---|---|
| Banking (IBPS / SBI) | Very High | 6–10 | RBI policy, inflation, CRR/SLR, monetary committee decisions — banking exams test the full spectrum. |
| SSC (CGL / CHSL / MTS) | Medium | 2–4 | Budget highlights, GDP data, and government economic schemes appear in SSC CGL GK section. |
| UPSC / State PCS | High | 10–20 | Economy is a core UPSC subject. Economic Survey, budget, and policy changes are heavily tested. |
What to Memorize from This Topic
- Key budget figures: fiscal deficit %, GDP growth projection, key scheme allocations
- RBI rate decisions: Repo rate, CRR, SLR, Reverse Repo — current values
- Rankings: India's position in ease of doing business, hunger index, HDI
- Abbreviations: FRBM, NBFC, MPC, PMGSY, PMGKAY — full forms and purpose
- Trade data: import-export balance, major trading partners
Practice Questions
Q1. What is the primary reason for merging Public Sector Banks in India?
- To reduce the number of employees
- To create stronger banks with a larger capital base
- To privatize all banks
- To increase interest rates
Explanation: The primary goal is to create stronger, more efficient 'global-sized' banks that can support large-scale credit needs.
Q2. Which body gives the final approval for the merger of Public Sector Banks?
- RBI
- Union Cabinet
- SEBI
- NITI Aayog
Explanation: While the RBI provides the framework, the final approval for PSB mergers is granted by the Union Cabinet.
How to Prepare Economy & Finance for Government Exams
Track current Repo Rate, Inflation rate, and GDP growth. These three numbers appear in almost every banking exam.
Keep a running note of new schemes with their ministry, launch date, and target beneficiary group.
Focus on the Economic Survey and Union Budget highlights — these single documents generate dozens of exam questions.
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