In April 2015, the Reserve Bank of India approved the merger of ING Vysya with Kotak Bank.

Billionaire banker Uday Kotak said on Saturday that bank mergers "create value if executed well", a day after the government announced a mega bank consolidation plan aimed at strengthening the financial system that will more than halve the number of state-run lenders in the country to 12. Describing the move as "a big bang step" by the government, Mr Kotak said it took two years for the "seamless integration" of Ing Vysya Bank with Kotak Mahindra Bank. Mr Kotak was referring to the merger of private sector lenders ING Vysya Bank and Kotak Mahindra Bank which was announced in 2014 and completed in 2016.

Mr Kotak is managing director and CEO of Kotak Mahindra Bank, chairman of IL&FS, and president designate of industry body Confederation of Indian Industry (CII).

Finance Minister Nirmala Sitharaman on Friday announced four mergers of state-run banks, including that of Punjab National Bank, Oriental Bank of Commerce and United Bank which would create the country's second largest public sector bank after State Bank of India.

Bank mergers. They create value if executed well. Our experience merging Ing Vysya bank with Kotak Mahindra bank is good. It took 2 years for seamless integration. Govt is smart in keeping same technology. Hence faster process. A Big Bang step! — Uday Kotak (@udaykotak) August 31, 2019

The Finance Minister also announced merger plans to combine Syndicate Bank with Canara Bank, Andhra Bank with Corporation Bank and Union Bank, and Allahabad Bank with Indian Bank.

The government said the state-owned banks would be repositioned to take the economy to the $5-trillion goal, with wide ranging reforms, financially stronger and well-provisioned lenders, technology-driven banking, synergy and stronger governance.

The government also announced an infusion of Rs 52,250 crore in 10 banks to boost their balance sheets.

After the merger, PNB will have a business of Rs 17.95 lakh crore, the government said.

Last week, the government said it would upfront a capital infusion of Rs 70,000 crore in public sector banks, instead of spreading it over the course of the financial year.

Credit ratings major Moody's has said that the upfront capital infusion will enable PSU banks to grow loans by around 13-15 per cent in the fiscal year ending March 2020, and allow them to meet the final Basel III capital adequacy requirements.

Meanwhile, the Reserve Bank of India in its annual report on Thursday said frauds in the banking system increased 74 per cent to Rs 71,543 crore in the financial year 2018-19.