Bank Merger Or Needless Distraction
by Anuj Chaudhary ·
On 30th August 2019, Minister of Finance and Corporate affairs ‘Nirmala Sitharaman’ along with Finance secretary ‘Rajeev Kumar’, economic affairs secretory ‘Atanu Chakravarty’, Revenue Secretory ‘Bhushan Pandey’, Expenditure Secretory ‘Girish Chandra Murmu’ and Anil kachi, announce the merger of 27 governments owned bank into 12 major banks.
The First Consolidation
The large capacity of one bank, the technology driven capacity of another bank, and the strong deposit franchise of third bank have all been brought together as Punjab National Bank, Oriental Bank of Commerce and United Bank of India merge together to form the Second largest PSB with business of 17.95 lakh crore which is approx. 1.5 times than the business of PNB alone. Together as one, they will form the second largest branch network in India with 11,437 branches.
Together these banks will give us high lending capacity, large cost reduction potential due to network overlaps, cost-saving and income opportunities for the joint ventures and subsidiaries.
It is made sure that the technology used in these three banks is compatible to avoid customer disruption.
The Second Consolidation
Canara Bank and Syndicate Bank will be merged to form the 4th largest PSB with business of 15.20 lakh crore I.e., approx. 1.5 times the current size of Canara Bank.
Together they will form the third largest branch network in India with 10,342 branches.
This consolidation will also provide the same benefits as the first one.
The Third Consolidation
Union Bank of India with Andhra Bank and Cooperation Bank will be merged to form the 5th largest PSB with business of 14.59 lakh crore i.e., approx. two times the size of Union Bank of India.
It will become the 4th largest bank in terms of network of branches with about 9,609 branches and their business will now become twice to about 4.5 times the existing bank business.
This consolidation will also provide the common benefits.
The Fourth Consolidation
Indian Bank and Allahabad Bank will be merged to form the 7th largest PSB with business of about 8.08 lakh crore i.e. approx. 1.9 times the size of Indian Bank.
This consolidation will have strong networks in North, South and East, providing overall coverage. There will be doubling of business size and major scaling up of reach due to complementary networks. The consolidated banks will provide high lending capacity.Points worth noting:
• The Punjab National Bank will be the anchor bank in the first major consolidation where the amalgamating banks will be OBC and Indian Bank of India. FinTech is the common system they use.
• Canara Bank and Syndicate Bank use the iFlex system.
• 82% of all PSB business and 56% of all the commercial business will be with these banks.
• Bank of India with 9.3 lakh crore of business size and Central Bank of India with 4.68 lakh crore of business size will continue as per.
• Indian Overseas Bank will continue to have regional presence, largely in South, with business size of 3.75 lakh crores.
• UCO Bank will have presence in East with business size of 3.17 lakh crore and Bank of Maharashtra in West with business size of 2.34 lakh crore.
• Punjab and Sindh Bank will have presence in the north with business size of 1.71 lakh crore.These 12 solidly present, well-consolidated, energized and adequately capital banks will now operate to target the 5 trillion economy promise of central government.
I am Anuj Chaudhary, a SEO specialist and content writer at Spotyourshop. I am managing digital content to build a relationship for the company. I am a regular author of spotyourshop ‘s blogs. Die-hard passionate with the profession and believe in simple living high thinking. You may also follow me on facebook & twitter.