Finance Minister Nirmala Sitharaman is set to hold a meeting with chief executives of amalgamating state-owned banks on Thursday to review the planning and preparedness for the merger, which will begin from April 1.
On the top of the agenda is to ensure “no disruption to flow of credit in the run-up to the amalgamation, on the day of the amalgamation and thereafter.”
From April 1, Punjab National Bank (PNB), Oriental Bank of Commerce, and United Bank of India will combine to form the nation’s second-largest lender. Canara Bank will take over Syndicate Bank; Union Bank of India is planned to be amalgamated with Andhra Bank and Corporation Bank; and Indian Bank will subsume Allahabad Bank. Immediately from April, the balance sheets and stocks of the banks will be merged. The integration of technology, human resources and branches/ATMs will take place in a phased manner.
The banks will present to the FM their “business and financial plans, including credit and deposits growth and year-wise synergy realisation plan.” The banks had already submitted these details to the department of financial services in the finance ministry recently.
The FM will check on the preparedness and capacities of the amalgamating banks to handle and address customer queries and difficulties and the banks may be asked to set up “common call centre with regional language support, to ensure customer issues are addressed and responded to the same day,” according to the communication issued by the finance ministry.
The banks will submit plans for “ensuring enhanced delivery of banking services and products to customers, with indication of likely time frames” to the government.
A monitoring cell will be set up to track “social media content and trends” with direct reporting line to the top management for real-time detection of amalgamation-related problems and “effective response to nip any issues in the bud.”
Besides, the banks will present a comprehensive list of frequently asked questions catering to different target groups such as pensioners, media, investors, analysts and employees.
This will be the first set of mergers of state-owned banks under the National Democratic Alliance government. From April 2019, Vijaya Bank and Dena Bank had become a part of Bank of Baroda. Before that State Bank of India took over its five associate banks and Bharatiya Mahila Bank from April 2017.
After the mega merger of 10 banks into four, the number of public sector banks in India will reduce from 27 in 2017 to 12.