Possible Major Bank Merger: Union Bank of India + Bank of India

Market conversations have again revived the idea of a Bank Merger between Union Bank of India and Bank of India, a combination that, on paper, could create a significantly larger public-sector lender. Even so, readers should separate policy intent from deal reality. The Government of India has recently told Parliament that it has no merger proposal for public sector banks under consideration at present.

So why does this specific Bank Merger keep returning to headlines and investor discussions? The answer sits at the intersection of (1) India’s earlier consolidation playbook, (2) the policy objective of building a few globally competitive banks, and (3) the sheer “math” of scale when you add Union Bank of India and Bank of India together.

This article explains the rationale, the potential benefits and risks, and the operational realities that decide whether a Bank Merger helps customers, employees, and shareholders or creates years of integration friction.

Current Status of Bank of India and Union Bank of India Merger Talks

The most important “status” point is simple: no authority has announced or notified a Union Bank of India–Bank of India Bank Merger. Recent policy commentary has kept consolidation on the table as an option, but the Government has also issued clear statements that no proposal is currently under consideration.

At the same time, senior-policy signals indicate that India continues to evaluate ways to create bigger banks, including through mergers. Separate reporting also describes a reform blueprint being reviewed at high levels that includes consolidation alongside governance and ownership reforms.

What this means: treat the Bank Merger as possible, not promised. Investors and customers should plan for “watch and verify,” not “assume and act.”

Why a Bank Merger Between Bank of India and Union Bank of India Matters

A Bank Merger between Union Bank of India and Bank of India attracts attention because it could create a much larger institution by several size measures:

Scale snapshot (latest publicly available figures)

Using widely tracked financial databases and reported bank results:

• Union Bank of India total assets: ₹14,99,855.71 crore
• Bank of India total assets: ₹10,42,581.95 crore
• Combined assets (indicative): ~₹25,42,437.66 crore (sum of the above)
  

That combined number is exactly why the Bank Merger narrative keeps returning. It immediately creates a lender with far greater balance-sheet heft.

Operational footprint indicators (latest available):

• Union Bank of India branches: 8,621. Employees: 73,900
• Bank of India branches: 5,328. Employees: 50,564

In other words, this Bank Merger would not be a “small tuck-in.” It would be one of the largest integration projects in Indian banking.

Bank of India and Union Bank of India: Size, Assets, and Market Scale

Any Bank Merger works best when both banks show stable asset quality and healthy operating momentum, because integration costs (technology, process changes, redundancies, harmonised HR policies) can run for multiple years.

Recent performance disclosures suggest both Union Bank of India and Bank of India delivered strong profitability in FY25:

• Union Bank of India reported Q4 FY25 net profit of about ₹4,985 crore and full-year FY25 profit around ₹17,987 crore (reported in financial coverage and bank disclosures).
• Bank of India reported Q4 FY25 net profit of ₹2,626 crore, up sharply year-on-year, supported by treasury gains and recoveries. It also guided toward ~12% loan growth ambition for FY26 in coverage.

What professionals infer from this: if policymakers want a consolidation cycle, they usually prefer it during periods of stronger profitability and improving asset quality because banks can “self-fund” part of the merger effort through earnings.

Strategic Advantages of a Bank Merger Involving Bank of India

If executed well, a Bank Merger between Union Bank of India and Bank of India could strengthen five areas.

A) Better scale economics (cost-to-income improvement)

A larger institution can spread fixed costs such as core banking technology, cybersecurity, compliance, and analytics across a wider asset base and customer base. That is the classic merger promise. With Union Bank of India and Bank of India, the overlap in corporate functions alone can be meaningful.

But scale does not automatically produce efficiency. The merged bank would need disciplined execution, including the consolidation of back-office operations, standardization of processes, and a clear technology roadmap.

B) Stronger ability to finance large projects

Large infrastructure and corporate projects demand higher single-borrower capacity and syndication strength. A larger Bank Merger entity can potentially play lead roles more often, especially where project finance, transaction banking, and supply-chain finance require deep balance sheet support.

C) Expanded distribution footprint

Together, Union Bank of India and Bank of India bring a broad branch network. In theory, this supports better reach in semi-urban and rural areas, while also strengthening metro penetration.

D) Product cross-sell and deeper “wallet share.”

A merged bank can cross-sell home loans, MSME credit, trade finance, digital payments, and wealth products if it unifies customer data and frontline incentives. Many mergers fail right here: they combine balance sheets but fail to unify customer experience.

E) Greater resilience through diversification

A bigger Bank Merger institution can diversify sector exposures and geography. If one region or sector turns volatile, the rest of the book can stabilise performance.

How a Bank of India–Union Bank of India Merger Impacts Customers

Customers mostly ask: “Will my account change?” In most bank consolidations, services continue, but changes arrive in phases.

If a Bank Merger happens, customers of Union Bank of India and Bank of India can reasonably expect:

• IFSC / MICR changes (often phased, with long transition windows)
• Cheque book validity timelines (old cheques typically remain valid for a period, then banks issue replacements)
• Digital banking upgrades or migrations
• Branch rationalisation in overlapping micro-markets (some branches merge, relocate, or change roles)

Professionally run integrations announce these changes clearly, well in advance, and keep customers “auto-migrated” rather than forcing repeated paperwork.

Key Integration Risks in a Large Bank of India Bank Merger

A Bank Merger can create value or destroy it, depending on execution quality. The biggest risks for a Union Bank of India + Bank of India combination would likely include:

A) Technology integration and cybersecurity

Core banking system alignment is the beating heart of any Bank Merger. Migration errors cause service disruptions, reconciliation issues, and customer dissatisfaction. The merged bank must invest heavily in testing, parallel runs, and security controls.

B) Cultural integration and HR harmonisation

Even when both banks sit in the public sector, they develop different internal cultures, risk appetites, credit processes, performance norms, and leadership styles. Industry leaders have emphasised that cultural alignment can decide whether a merger runs smoothly.

C) Credit underwriting alignment

A merged bank must standardise:

• credit approval matrices
• collateral valuation standards
• early warning signals and monitoring
• recovery and resolution practices

If the merged institution delays these decisions, it can end up with “two banks inside one bank,” which increases risk.

D) Integration cost overrun

Integration costs can exceed initial estimates. Technology, vendor contracts, branding, HR, compliance, and process redesign. A Bank Merger must establish a merger management office with strict KPI ownership and timelines.

Regulatory and Government Approvals Required for Bank of India Merger

Even if decision-makers agree politically, a Bank Merger still needs a pathway through multiple approvals and operational milestones (exact sequencing can vary). Typically, these include:

• Government and DFS direction (for PSBs)
• Regulatory oversight expectations
• Competition and market-structure considerations
• Board approvals and integration plans
• Detailed customer and operational transition plans

Given the Government’s parliamentary statement that no proposal is under consideration, the process would first require a clear change in official stance.

Bank of India and Union Bank of India: Combined Financial Snapshot

Read this correctly: “Combined” does not mean the merged bank would retain every branch or role. Many mergers pursue rationalisation to reduce overlap and improve efficiency.

Investor Perspective on a Potential Bank of India Bank Merger

Markets usually price a Bank Merger story through three questions:

1. Will the merger actually happen? (probability and timeline)
2. Will the merged bank improve ROA/ROE over time?
3. Will integration risks outweigh the synergy story?

Recent strong profits at Union Bank of India and BOI create a supportive backdrop, but investors still discount execution risk heavily until they see a credible integration blueprint, merger swap/structure clarity, and an approved timeline.

Final Outlook on the Possible Bank of India and Union Bank of India Merger

A Bank Merger between Union Bank of India and BOI remains a plausible consolidation scenario because it immediately creates a much larger bank by assets and footprint. The combined scale (about ₹25.4 lakh crore in assets, indicative) explains why the idea persists.

However, professionals should anchor the discussion in official reality. The Government has stated that it has no PSB merger proposal under consideration at present. Policy signals still keep consolidation in the broader reform toolkit, but until authorities notify a proposal, treat this as an analysis of a possible Bank Merger, not confirmation of a completed decision.

References

• Union Bank of India – Balance Sheet & Total Assets (latest figures)
• Bank of India – Profile & Key Bank Data (including assets and branch network)
• Report on the Indian government exploring the merger of Union Bank and Bank of India
• Union Bank of India company profile (including branch & employee numbers)
• PSU bank merger news, including government plans related to Union Bank of India & Bank of India