New Delhi, March 28 : The government is going ahead with the plan to consolidate public sector banks, undeterred by the spread of Covid-19 that has disrupted business across the country, including banking operations.
Accordingly, the amalgamation of the Oriental Bank of Commerce and the United Bank of India with the Punjab National Bank; the Syndicate Bank into the Canara Bank; the Andhra Bank and the Corporation Bank into the Union Bank of India; and of the Allahabad Bank into the Indian Bank is being completed on schedule and will be effective from April 1.
In a press release on Saturday, the Reserve Bank of India said that branches of Allahabad Bank will operate as branches of Indian Bank from April 1, 2020. Similarly, branches of Andhra Bank and Corporation Bank will operate as branches of Union Bank of India from the appointed date.
All customers, including depositors of amalgamating banks, will automatically be transferred to the principal bank under the merger process, the RBI said.
The Narendra Modi-led government had announced the mega merger in August last year. Earlier this month the cabinet gave its approval for the mergers that will consolidate operations of 10 public sector banks (PSBs) into four ‘mega banks’.
Though the other two merger schemes involving the amalgamation of the Oriental Bank of Commerce and the United Bank of India with the Punjab National Bank and that of the Syndicate Bank into the Canara Bank are getting implemented from next month, the RBI did not offer information on its progress.
It was widely expected that the government may defer the consolidation exercise for some time due to the Covid-19 related disruptions. But as all banks involved in the process are government entities and there is no immediate plan to restructure branches or move employees, it was felt the process could go ahead unhindered. There would only be a change of name for a few banks but all will remain under the PSU tag.