Punjab National Bank, the anchor bank for the merger of Oriental Bank of Commerce, United Bank of India and Punjab National Bank, has appointed Ernst & Young (EY) as a consultant for the process.
Notably, 34 committees were formed, with each having representatives of three banks, to formulate policies related to different verticals like human resources, IT, and products among others. While each of the banks have submitted their recommendations, EY is likely to help the banks to standardize them. Meanwhile, a steering committee of chief executives of the three merging banks, is also likely to give its suggestion by the end of this month.
“The anchor bank has appointed EY as a consultant. They will study the suggestion of each of the banks. If there are certain areas which need to be harmonized in tune with the industry, they will suggest that,” said Ashok Kumar Pradhan, Managing Director & Chief Executive Officer of United Bank of India.
While there are similar products offered by the banks to be merged, there are some overlapping and some unique products.
Notably, the consultant is also likely to suggest on branding of the bank as a merged entity. According to a source, non-anchor banks have sought a new name for the entity formed out of its merger with Punjab National Bank and Oriental Bank of Commerce.
This apart, some of the other areas which require deliberations include HR practices and IT. While IT integration might take up to a year, the three banks are already in the process of making transfers and promotions for next year to make the HR practices more uniform. Also, while branch rationalisation would be on the cards, there won’t be any voluntary retirement schemes. PSBs are already going very slow on recruitment over recent years,
Under the mega merger plan by Union Finance Minister Nirmala Sitharaman, 10 public sector banks would be consolidated into four. Punjab National Bank, Oriental Bank of Commerce and United Bank of India will combine to form the nation’s second-largest lender; Canara Bank and Syndicate Bank will merge; Union Bank of India will amalgamate with Andhra Bank and Corporation Bank; and Indian Bank will merge with Allahabad Bank.
The consolidation exercise will bring down the number of nationalised public sector banks to 12 from 27 in 2017. April 1, 2020 has been set as deadline for completion of the merger process.