NEWS BANK MERGERS
NEW DELHI: State-owned Punjab National Bank (PNB) on Wednesday issued an official statement saying all nation-wide branches of United Bank of India and Oriental Bank of Commerce have started functioning as PNB branches under an amalgamation plan. The amalgamation of Punjab National Bank, United Bank of India and Oriental Bank of Commerce has come into effect from Wednesday, April 1, as was previously announced.
The Union Cabinet had a month ago approved amalgamation of 10 public sector banks (PSBs) into four global size lenders, beginning the new financial year, April 1. As a result, there will be seven large PSBs and five smaller ones. While the Oriental Bank of Commerce and the United Bank of India merged into Punjab National Bank, the Syndicate Bank merged into Canara Bank; the Andhra bank and the Coropration Bank merged into Union Bank of India. Allahabad Bank merged into Indian Bank.
Each of the new amalgamated entity is having business of over Rs 8 lakh crore. Union finance minister Nirmala Sitharaman had said this would help create banks with scale comparable to global banks and capable of competing effectively in India and globally.
The All India Bank Officers’ Confederation (AIBOC), with a view to satisfying the vested interests of the officers, tried to put a spoke into the wheel dealy the merger by citing the present Covid health crisis facing the nation. The Union Government put its foot down and went ahead with the merger. Senior officers of the banks are principally responsible for the problems like bad debts plaguing the banking sector in India. They advanced loans without sufficient guarantees to banking honchos, who then scooted from the scene without making repayments. The government took action against very few of these officials.
The merger of PNB with two banks will create the second largest nationalized bank for the country – both in terms of business and branch network. The amalgamated bank will have a wider geographical reach through 11,000 plus branches, more than13,000 ATMs, one lakh employees and a business mix of over Rs 18 lakh crore
The largest bank is State Bank of India, which had merged its subsidiaries with it some time ago. “The synergy from the amalgamation will create a globally competitive, next generation bank, PNB 2.0, the bank said and added that all customers, including depositors, will be treated as PNB customers.
PNB 2.0 will be offering specified inter-operable services through all branches and all platforms including Mobile and Internet Banking.
Agency reports quoting SS Mallikarjuna Rao, MD & CEO of Punjab National Bank, as saying, “The bigger geographical footprint will help us serve our customers more effectively and efficiently.” PNB 2.0 has appointed ‘Bank Sathi’ at all branches/zones/head office (of all three banks) that will address customer concerns and assist them in choosing the right products and services. It will also smoothen the customer transition, he said.
A robust risk governance mechanism has been set up to mitigate risks and make the banking experience secure and safe, PNB noted in the backdrop of the massive scams engulfing India’s banking system, with several banks already breathing heavy under the weight of what is known as Non-Performing Assets – meaning, unreturned loans taken mostly by business sharks, totally of the order of Rs 10 lakh crore. Governmental steps to get back the money from these entities, many of whom have the means to pay but are fighting cases in Indian courts – as also courts in UK by the likes of Kingfisher group chief Vijay Mallya – to avoid repayment. IHN-NN
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