With the merger of 6 Public Sector Undertaking Banks into 4 entities, .India’s biggest consolidation exercise in banking space came into effect on Wednesday
The move is aimed to make these banks globally competitive. It was announced last August and brings down the total number of public banks to 12 from 27.
The Reserve Bank of India approved the merger on Saturday. The Union Cabinet had approved the the scheme on March 4.
Effective April 1, 2020, Oriental Bank of Commerce and United Bank of India are merged into the Punjab National Bank.
Together these banks are now the second-largest public sector bank in the country after State Bank of India.
Syndicate Bank merged with Canara Bank to become the fourth-largest public sector lender in India
Andhra Bank and Corporation Bank merged into the Union Bank of India, while Allahabad Bank merged into Indian Bank.
WHAT THE MERGER MEANS
Customers and depositors of the merging banks will be treated as customers of the banks into which these banks have been merged.
While the existing accounts and services of the customers will continue, eventually customers are likely to get a new customer ID and account number.
The current rate of interest for existing Recurring Deposits and Fixed Deposits will continue till maturity.
FD renewal will be done with the latest term deposit rates of the amalgamated bank.
Existing credit and debit cards will remain valid until the date of expiry and will be renewed by the amalgamated bank on its expiry.
After the merger, six independent public sector banks will continue to run in India. These include the Indian Overseas Bank, UCO Bank, Bank of Maharashtra, Punjab and Sind Bank, Bank of India and the Central Bank of India.
The bank merger measures comes amid the nationwide lockdown in the country due to COVID-19 pandemic.
Earlier this week, bank officers wrote to the Prime Minister asking to defer the merger. However Finance Minister Nirmala Sitharaman on Thursday clarified that the merger will continue as per plan.
(With inputs from Bureau)