On 26th March 2020, where the whole World is lockdown due to COVID-19, another side the bank’s amalgamation plan of Govt. of India is very much on track and bank consolidation will take effect from 1st April 2020.
The Indian Union Cabinet is sure and gives its approval in the amalgamation of 10 Public Sector Banks (PSBs) into 4 major big size banks from 1st of April 2020.
Banking Secretary Debasish Panda said that the “Merger process is very much on track and expressed hope that the banking sector would be able to meet the challenges thrown by the pandemic”.
Rajnish Kumar the chairman of State Bank of India said at an event organised by Indian Banks’ Association that “One of the challenges before public sector banks in the near future is the merger of the bank…IT merger needs to be handled very carefully,”
On Wednesday, the largest supervisory cadre union in the banking industry which is All Indian Bank Officers’ Confederation (AIBOC) write a letter to PM Narender Modi and requested to revisit the decision of merger of banks in view of Corona Virus outbreak.
According to the letter “The all process of merger process involves a huge number of tasks requiring constant interaction and congregation of the employees of the anchor and target banks and representatives of outsourced consultants, agencies, etc., in which the current state of affairs is unwarranted particularly in view of the ‘break the chain’ effort undertaken by the government to combat the spread of the fatal disease.”
As per the mega amalgamation plan following PSBs are consolidated as:
- All branches of Oriental Bank of Commerce and the United Bank of India will merge into Punjab National Bank which will be the country’s second-largest lender after State Bank of India.
- All branches of Syndicate Bank merge into Canara Bank.
- All branches of Andhra Bank and Corporation Bank merge into Union Bank of India.
- All branches of Allahabad Bank merge into Indian Bank.
In past last year, Dena Bank and Vijaya Bank were merged into Bank of Baroda. Before these, the Government of India had merged five associate banks of SBI and Bharatiya Mahila Bank with the State Bank of India.
The merger will result in the creation of seven large PSBs (Public Sector Banks) with scale and national reach, with each amalgamated entity having the business of over ₹ 8 lakh crore and it would help create banks with a scale comparable to global banks.
In addition, the result of amalgamation would also provide force to amalgamated entities by increasing their ability to support larger ticket-size lending and have competitive operations by greater financial capacity.