Indian Bank expects to complete merger with Allahabad Bank by 31 March: Managing Director Padmaja Chunduru

State-owned Indian Bank expects to complete the merger with Allahabad Bank by the end of current fiscal, a top official said

Press Trust of India September 03, 2019 15:40:20 IST
Indian Bank expects to complete merger with Allahabad Bank by 31 March: Managing Director Padmaja Chunduru
  • Last week, the government announced the consolidation of 10 public sector banks into four mega state-owned lenders, including the merger of Allahabad Bank with Indian Bank

  • Indian Bank last week received a communication from the Ministry of Finance that the Alternative Mechanism after consultation with Reserve Bank of India has cleared a proposal for the merger

  • The merger of Indian Bank and Allahabad Bank will create a robust entity with a pan-India presence, Indian Bank Managing Director Padmaja Chunduru said

New Delhi: State-owned Indian Bank expects to complete the merger with Allahabad Bank by the end of current fiscal, a top official said.

Last week, the government announced the consolidation of 10 public sector banks into four mega state-owned lenders, including the merger of Allahabad Bank with Indian Bank.

"We have to go to board first...there is a process to follow. In the next few months, boards of both banks should complete the process. I expect that all the process should ideally be over by 31 March," Indian Bank Managing Director Padmaja Chunduru told PTI.

Indian Bank last week received a communication from the Ministry of Finance that the Alternative Mechanism after consultation with Reserve Bank of India has cleared a proposal for the merger.

When asked about the board meeting for considering the proposal for amalgamation, she said, it will happen soon.

Indian Bank expects to complete merger with Allahabad Bank by 31 March Managing Director Padmaja Chunduru

Representational image. Reuters.

"It may happen during the week or early next week," she said.

The merger of Indian Bank and Allahabad Bank will create a robust entity with a pan-India presence, she said.

Currently, Indian Bank has a strong presence in South India whereas Allahabad Bank is present in northern and eastern India.

This will also enable major scaling up of both banks' business, due to complementary networks as currently, both use the same CBS platform (BaNCS), thereby enabling the quick realisation of gains, she said.

The merged entity will emerge as the 7th largest public sector bank with a business of Rs 8.08 lakh crore (approx 1.9 times of pre-merged Indian Bank) and will have a nationwide presence spread over 6,100 branches with about 43,000 employees.

"We are confident that given our commitment to deliver the best, we will be among the first to complete the integration and shall thrive on the mutual strengths, thereby emerging as a global bank of the future," she said.

Also, as a combined entity, it can leverage the balance sheet which will make the lending capacity more robust, she said.

On the technical and HR integration, she said, it is likely to be seamless, so will be the cultural processes and systems.

"Post-merger, our top priority apart from business growth and profitability will be employee management and welfare. Further with this integration, focus on MSMEs and agricultural sector in the respective geographies can be leveraged better," she said.

She ruled out any closure of branches and staff retrenchment.

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