Union Bank–Bank of India merger buzz: Will your account number, IFSC and savings change?

New Delhi: The Central Government of India is actively planning a major consolidation in the public sector banking space, with a proposal to merge two of the country’s largest state-run lenders — Union Bank of India and Bank of India. 

If implemented, this merger will create the second-largest public sector bank in the country after the State Bank of India (SBI) and reshape India’s banking landscape yet again.

Finance Minister Nirmala Sitharaman has reiterated the government’s vision of building ’world-class’ banks capable of competing with global financial institutions, and consolidation is expected to be a key focus of the Budget 2026–27.

Discussions between the Finance Ministry, Reserve Bank of India (RBI), and bank management teams are reportedly ongoing, though no official cabinet approval has been announced yet.

The proposed merger would combine the extensive branch networks, customer bases, and asset portfolios of both banks. Together, the merged entity could have assets of over ₹25.6-26 lakh crore and serve around 250 million customers, making it slightly smaller than SBI but larger than the current second-largest PSU bank.

Impact on Customers:

For account holders of either bank, account numbers and IFSC codes may change after the merger is formally implemented. Historically, during bank consolidations in India, customers are notified well in advance and given timelines to switch to new account details.

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Chequebooks, debit/credit cards, internet banking, and UPI IDs are usually reissued with updated information. Branches continue to operate normally during transition, and there is no loss of balance or savings.

Strategic Rationale:

The move forms part of a broader strategy to reduce non-performing assets (NPAs), improve operational efficiency, and strengthen the financial stability of public sector lenders. This follows earlier consolidation rounds between 2017 and 2020, when the number of PSU banks fell from 27 to 12.

While plans are gaining traction, the government has not made any formal announcement — meaning the merger is still under consideration and subject to approvals.