State-run Canara Bank is looking to buy smaller rival Dena Bank, the Business Standard reported on Wednesday quoting unnamed sources.
Canara had appointed Ernst & Young to explore the possibility of the deal and the banks' chairmen would meet soon, the report said, quoting sources close to the development.
Canara Bank chairman M.B.N. Rao and Dena Bank officials could not be immediately reached for comments.
Finance Minister Palaniappan Chidambaram has called for mergers among state-run banks to create stronger banks, but progress has been slow. Mergers are opposed by labour unions and the federal government's communist allies.
The government owns 73 percent of Canara Bank and 51 percent in Dena Bank.
Source : NDTV Profit