Merger of 10 PSU banks comes into effect from today; 10 things you need to know about implications of govt's move

The merger of 10 public sector undertaking banks into four will come into effect from today, 1 April. The announcement of the merger was made by Finance Minister Nirmala Sitharaman in August last year. The cabinet on March 4 this year gave its final approval for the move. [caption id=“attachment_4469065” align=“alignleft” width=“380”]  Representational image. Reuters.[/caption] Here’s a ready reckoner on the bank merger

• The banks are being amalgamated with a larger bank, referred to as the anchor bank
• Account holders of merging banks will now be treated as customers of the anchor banks
• With the merger, four PSU banks - Punjab National Bank (PNB), Canara Bank, Union Bank and Indian Bank - will assume operations of six others
• Oriental Bank of Commerce (OBC) and United Bank of India (UBI) will be merged with Punjab National Bank (PNB) and the three would together form the second-largest PSU bank after State Bank of India (SBI).
• Andhra Bank and Corporation Bank will be combined with Union Bank of India. Syndicate Bank will be clubbed with Canara Bank and Allahabad Bank will be merged with Indian Bank
• All the branches of six amalgamating banks will now function as that of the four anchor banks.
• Following the merger, account numbers and customer IDs will change
• The average monthly balance which a customer is required to maintain, service charges and fees might also change. You will have to get an update from the anchor bank
• For multiple bank accounts with both merging as well as anchor banks, there might be a single customer ID now
• There will be no change in the existing interest rates and fixed deposits after the merger. It will just be transferred to the anchor bank. However, at the time of renewal, you will have to accept the interest rates of the anchor bank
• New cheque books will be issued by the anchor banks and the existing ones will no longer be effective.