After the merger of Allahabad Bank with it, Indian Bank sees growth in lending and deposits and new opportunities emerging despite the lockdown, according to Padmaja Chunduru, Managing Director & CEO of Indian Bank. Both the banks have come together amid the coronavirus (Covid-19) lockdown and started working as a single bank with a larger footprint. Even during the lockdown period, both lending and deposits are growing. "We must be careful in assessing and giving the loans. We have been one of the earliest banks to announce emergency loans across the table. I think this opens up new opportunities. First of all we have to assess the risks because there are so many more sectors now and the whole paradigm is shifting," Chunduru said. The merger was a big task in front of the bank, but when confronted with the Covid-19 issue, the whole bank came together and the safety of the employees became paramount. Safety measures have been implemented across the bank. On April 24, it was Allahabad Bank's Foundation Day, but the amalgamated entity could not celebrate due to the lock-down.
The bank has also launched an online learning management solution for the staff. The best the welfare measures that were offered by the two banks have been made applicable to all the employees and all of them have been well received. In terms of alignment of products of both the banks, especially those related to housing loans, Indian Bank had certain products which were more attractive to the customers and they were launched across the country.
Allahabad Bank had one or two products for agriculture investments like tractors, which have been extended to Indian Bank customers.
The biggest ever consolidation exercise in the public sector banking space is slated to take shape on Wednesday when six PSU lender will be merged into four in a bid to make them globally competitive.
The exercise assumes significance as it is taking place at a time when the entire country is under the grip of COVID-19 outbreak. It has triggered 21-day lockdown to contain the spread of the deadly virus.
Experts said merger at this point of time will not be very smooth and seamless. However, heads of the anchor banks are exuding confidence. "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 not any disruption for employees and customers. We are ensuring zero disruption," Union Bank of India Managing Director Rajkiran Rai G told PTI.
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The four anchor banks -- PNB, Canara Bank, Union Bank and Indian Bank -- are postponing some part of the implementation and processes due to the lockdown. "For merging banks, we have not changed some of the process like loan process etc, which we proposed to do earlier. However, because of the prevailing situation we will be continuing old system till the situation comes under control," he said.
With the merger, the bank looking at more than Rs 2,500 crore of synergy benefits in the next three years, he added. As per the mega consolidation plan, 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, there will be seven large public sector banks (PSBs), and five smaller ones. There were as many as 27 PSBs in 2017. The total number of public sector banks in the country will come down from 18 to 12 beginning next financial year.
Speaking on preparedness, Indian Bank MD Padmaja Chunduru said harmonisation of products -- both on the loan and deposit sides -- has been completed and the same products will be offered to all customers.
She also said all the deposit and loan products, including access to Indian Bank's emergency credit lines launched in the wake of Covid-19 would be made available to the customers of Allahabad Bank.
"We have focused all our resources on the important things that matter for day one -- treasury integration has happened and IT integration to the extent of product harmonization and rolling out of the same products has happened," she said.
She expects the entire IT integration to be completed by December 2020. Following this merger, PNB will become second largest after the State Bank of India (SBI), Canara Bank fourth, Union Bank of India fifth and Indian Bank seventh biggest public sector lender.
Commenting on the consolidation, Canara Bank MD L V Prabhakar said, "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". The combined entity will be large but with an unchanged approach to grass-root banking, customer delight, and satisfaction, Prabhakar said.
