Two proposed PSB merger plans may come under IRDAI scanner

The two sets of the proposed public sector bank (PSB) merger may come under the scanner of the Insurance Regulatory and Development Authority of India (IRDAI) as it violates the insurance regulator's cross-shareholding regulations, multiple sources told CNBC-TV18.

Last week, Finance Minister Nirmala Sitharaman announced the merger of 10 public sectors banks into four. The proposal would be executed in four sets under which  Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank will be merged to form India’s second-largest bank. Also, Canara Bank will merge with Syndicate Bank; Union Bank will merge with Andhra Bank and Corporation Bank while Indian Bank will merge with Allahabad Bank.

According to sources, who spoke on condition of anonymity, the two sets of the proposed PSB merger will violate the IRDAI cross-shareholding regulations assuming the merger goes through in its proposed form.