New Delhi: The biggest ever consolidation exercise in the public sector banking space is slated to take shape Wednesday when six PSU lenders will be merged into four in a bid to make them globally competitive.
The exercise assumes significance as it is taking place at a time when the entire country is under the grip of COVID-19 outbreak. It has triggered 21-day lockdown to contain the spread of the deadly virus.
Experts have said merger at this point of time will not be very smooth and seamless. However, heads of the anchor banks are exuding confidence.
“We don’t foresee any problem it is going as per the plan. We have reviewed in the light of this situation also. We have done certain modification in implementation so that there is no disruption for employees and customers. We are ensuring zero disruption,” Union Bank of India MD Rajkiran Rai G said Tuesday.
The four anchor banks – Canara Bank, Punjab National Bank, Union Bank and Indian Bank – are postponing some part of the implementation and processes due to the lockdown.
“For merging banks, we have not changed some of the process like loan process etc, which we proposed to do earlier. However, because of the prevailing situation we will be continuing old system till the situation comes under control,” Rajkiran stated.
With the merger, the banks are looking at more than Rs 2,500 crore of synergy benefits in the next three years, informed Rajkiran.
As per the mega consolidation plan, Oriental Bank of Commerce and United Bank of India will merge into Punjab National Bank (PNB); Syndicate Bank into Canara Bank; Andhra Bank and Corporation Bank into Union Bank of India; and Allahabad Bank into Indian Bank.
There were 27 PSBs in 2017. The total number of public sector banks in the country will come down from 18 to 12 beginning next financial year.
Speaking on preparedness, Indian Bank MD Padmaja Chunduru said harmonisation of products – both on the loan and deposit sides – has been completed and the same products will be offered to all customers. She also said all the deposit and loan products, including access to Indian Bank’s emergency credit lines launched in the wake of Covid-19 would be made available to the customers of Allahabad Bank.
Following this merger, PNB will become second largest after the State Bank of India (SBI), Canara Bank fourth, Union Bank of India fifth and Indian Bank seventh biggest public sector lender.
PTI