State-owned banks’ mergers come into effect on April 1, RBI says

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Image for illustration.

Image for illustration.

The government announced on March 4, as part of its consolidation plan, the merging of 10 state-owned banks into four banks to create larger, stronger banks in the public sector.

  • PTI New Delhi
  • Last updated: March 28, 2020, 11:49 pm IST

The plans to merge ten state-owned banks into four lenders will come into effect on April 1, according to the Reserve Bank of India.

The banking regulator announced in separate publications that the branches of the merging banks will operate from the banks in which they were merged.

The government announced on March 4, as part of its consolidation plan, the merging of 10 state-owned banks into four banks to create larger, stronger banks in the public sector.

Bank employees ‘unions, however, wrote to the Prime Minister earlier this week to postpone lenders’ merger plans due to the blockage triggered by the Corona virus outbreak.

Finance minister Nirmala Sitharaman had made it clear on Thursday that the consolidation plan for megabanks was very well on track and would come into force on April 1, despite the fact that the coronavirus pandemic got the country out of hand.

According to the program, the Oriental Bank of Commerce and the United Bank of India will be merged into the Punjab National Bank. Syndicate Bank in Canara Bank; Allahabad Bank in Indian Bank; and Andhra and Corporation banks in Union Bank of India.

The branches of the Oriental Bank of Commerce and the United Bank of India will function as branches of the Punjab National Bank and the branches of the Syndicate Bank as branches of the Canara Bank from April 1, 2020, RBI announced in a separate press release.

The branches of Allahabad Bank will operate like those of Indian Bank, while the branches of Andhra Bank and Corporation Bank will function as branches of the Union Bank of India from the beginning of the next fiscal year 2020-21, the RBI said.

“The merger of the Oriental Bank of Commerce and the United Bank of India with the Punjab National Bank Scheme, 2020 of March 4, 2020, issued by the Indian government … The program will enter into force on April 1, 2020,” RBI said .

Customers, including depositors from merging banks, will be treated as customers of the banks where these banks were merged with effect from April 1, 2020, according to the RBO.

Banking services across the country have been impacted by the effects of COVID-19, with almost complete closure across the country.

In a letter to the Prime Minister on March 25, the All India Bank Officers’ Confederation (AIBOC) said: “The finance minister announced a number of measures yesterday to address the harmful effects of the contagion. We also expect an extension beyond the closure of activities and the revision of the deadline itself from March 31 to June 30, which is the order of the day. ”