A rapid increase in the volume of the NPAs of the public sector banks has led to the slow development in the economy as major portion of the deposits are held with these banks. Nearly 85% of the unpaid loans are held in the PSBs and increasing continuously. This can be identified as the main reason why the profits of the PSBs are gradually declining from in last few years. Government is bound to have 51% stake in the PSBs which cannot be reduced, so it is trying to reduce its spread by reducing the number of banks and making the available ones stronger. The option left with Government either to close the non performing banks or to merge them with a stronger one. Closing a bank is not considered as wise decision as it will affect the customers of the bank and reduce the capital and savings. This may also hamper the confidence of people in the banks. So it will be a right decision to merge as it will impact in many ways, such as increased capital of the new bank, support to the weaker bank, increased size of the bank etc. the point of merger was also mentioned in the Budget presented in 2014. This time the government is really serious about this matter and announced the merger of 10 PSBs in August 2019. What would be the possible impacts of the merger? In the paper we will see how the merger has impacted the banks and the other related parties. We will also analyse whether it was good or bad from various contexts.

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Keywords: Merger, Consolidation, PSBs, Impact, Entitites, NPAs, Non Performing Banks.