Customers will not face any disruption: Indian Bank on merger with Allahabad Bank
NEW DELHI: Indian Bank, which is merging Allahabad Bank with itself, on Tuesday said customers of both banks will not face any disruptions after amalgamation effective from Wednesday.
Harmonisation of products, both on the loan and the deposit fronts, has been completed and the same products would be offered to all customers, Indian Bank Managing Director and CEO Padmaja Chunduru said.
The merger is part of the government’s mega consolidation plan to amalgamate 10 state-run banks to create four global-size lenders.
“Tomorrow is day one and the initial processes are complete. The main thing is about the customer service and there won’t be any disruption for customers of both the banks,” Chunduru told PTI in an interview.
She said that all 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.
According to her, amalgamation consists of integration of products and processes, information technology and human resources.
“We have focused all our resources on the important things that matter for day one- treasury integration has happened and IT integration, to the extent of product harmonization and rolling out of the same products, has happened,” she said.
The entire IT integration to be completed by December 2020, she said, adding that integration of human resources is an ongoing process, which would take another three to four months.
The combined entity would have 6,060 branches, a network of 2,870 ATMs and banking correspondent network of 9,000.
“As a combined entity, Indian Bank’s balance sheet is much stronger. We can offer higher amount of loans to the corporate segment, and will be able to invest in the required skill sets whether it is credit management or recovery or risk management, to bring in more differentiated products and more value added services and also on the digital front,” she said.
She also said that post merger, the bank would not require capital on an immediate basis. Also, the merged entity would retain both the subsidiaries of Allahabad Bank — a general insurance venture and an asset reconstruction company.
“Indian Bank is going to inherit both the subsidiaries. After tomorrow, we will have a look at the whole thing and then see how to take it forward,” she said.
Allahabad Bank holds 28.52 per cent stake in Universal Sompo General Insurance Company. Other investors include Indian Overseas Bank, Karnataka Bank, Dabur Investment and Japanese insurance major Sompo Japan Nipponkoa Insurance Inc.
It also holds 27.04 per cent stake in asset management company — ASREC (India) Ltd — along with other banks/ institutions.
There are three other mergers of public sector banks under the government’s mega consolidation plan.
Punjab National Bank would take over Oriental Bank of Commerce and United Bank of India to form the nation’s second largest lender.
Syndicate Bank would merge with Canara Bank, and Andhra Bank and Corporation Bank would get amalgamated with Union Bank of India.
Following the consolidation, there would be seven large public sector banks and five smaller ones.
There were as many as 27 state-run banks in 2017 when SBI took over five of its associates and Bharatiya Mahila Bank.
In 2019, Vijaya Bank and Dena Bank got merged with Bank of Baroda, making it the third largest state-run bank.