The human resource integration for the merger of United Bank of India (UBI), Oriental Bank of Commerce (OBC) and Punjab National Bank (PNB) will be on a fully automated software. This will be done to avoid discrimination among employees of one bank by another.
Moreover, for the next financial year, all transfers and promotions will be decided by respective banks, and not by the merged entity.
According to Ashok Kumar Pradhan, managing director (MD) and chief executive officer (CEO) of United Bank of India, a functional committee on HR integration is likely to finalise the modalities of the merger by the end of this financial year. Nearly 34 committees under different verticals have been formed for the merger.
“HR integration is one of the key issues in the merger process. The aim is to cover all employees of the merged entity, about 100,000 in number, under the fully automated process. We want to ensure that all transfers and promotions are ensured purely on the basis of merit,” said Pradhan.
Although most banks use an automated software for processes like raising bills and travels, not all use the mechanism for total employee assessment.
The automated system will entail assessing merit-based on data fed into the system. For example, performance would be measured in terms of meeting lending targets, recovery and expense management among other things. The system will also have a process of referral and review by peers, juniors and seniors for objective assessment.
Apart from human resources, IT is another challenge in the merger process, say bankers. While the merger of balance sheets may be achievable by April 1, 2020, IT integration could take more than a year after the formal merger notification, according to the public sector banks.
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.