Six public sector banks will cease to exist after mega-merger comes into effect on April 1

The new financial year is set to begin on Wednesday (April 1) and this year this day is significant because it will witness see the merger of six public sector banks into four (anchor banks).

As per the mega consolidation plan announced few weeks ago by Prime Minister Narendra Modi-led government at the Centre, Oriental Bank of Commerce and United Bank of India will merge into Punjab National Bank (PNB); Syndicate Bank into Canara Bank; Andhra Bank and Corporation Bank into Union Bank of India; and Allahabad Bank into Indian Bank. 

Following the consolidation, India will have seven large public sector banks (PSBs), and five smaller ones.After the merger, PNB will become second largest bank in India after State Bank Of India.  Canara Bank fourth, Union Bank of India fifth and Indian Bank seventh biggest public sector lender.

It is to be noted that the merger is taking at a time when the entire country is battling coronavirus pandemic, which has triggered a 21-day nationwide lockdown.

According to experts, the merger of banks at this point of time may witness some trouble but heads of the anchor banks are confident of seamless transition.

“We don’t foresee any problem it is going as per the plan. We have reviewed in the light of this situation also. Certain modification in implementation we have done so that there is no disruption for employees and customers. We are ensuring zero disruption,” Union Bank of India Managing Director Rajkiran Rai G told PTI.

“We have planned very well and from tomorrow onwards we will ensure that the merged entity functions more efficiently and effectively. Particularly we would ensure that customer services remain uninterrupted,” PNB MD S S Mallikarjuna Rao said.

Notably, there were 27 public sector banks (PSBs) in the country in 2017 and now the total number of public sector banks in India will reduce from 18 to 12 in the new financial year.

“We are delighted that following the amalgamation as a single legal entity, we will become a powerful banking institution that is globally competitive and efficient working towards providing differentiated customer experience excellence across all our products and services,” Canara Bank MD L V Prabhakar said.