With effect from 1 April 2020, ten Public Sector Undertaking (PSU) banks are being merged to form 4 banks. This is one of the biggest mergers in the banking sector in India. The government had announced the merger back in August 2019. As this merger comes into effect, the number of public sector banks in India will come down to 12 from the count of 27 (in 2017).
In the light of the recent COVID-19 virus breakdown in the world, it was being speculated that the government might postpone the merger.
What are the banks that are being merged?
The banks that are being merged (w.e.f 1 April 2020) can be listed as follows:
|S.No||Bank Name||To Be Merged With|
Important things that you need to know about the bank mergers
As the merger of the banks mentioned above becomes effective, there are a few things that we should know. Here is a list of all the important details that you need to know about the April 1 merger of banks.
- The customers of the merging banks will now be treated as the customers of the banks in which they have been merged. These customers include depositors as well.
- After the merger, with effect from 1 April 2020, there will be a total of 12 PSU banks.
- Out of the 12 PSUs, six banks – Indian Overseas Bank, UCO Bank, Punjab and Sindh Bank, Central Bank of India, Bank of India, and Bank of Maharashtra are going to be independent.
- Out of the 12 PSUs, the other 6 banks – State Bank of India (SBI), Union Bank of India, Punjab National Bank, Canara Bank, Indian Bank, and Union Bank of India are going to be the merged banks.
Status of the existing branch offices of the banks that are being merged
The status of the existing branch offices of the banks that have been recently merged with other banks can be listed as follows:
- The branch offices of Oriental Bank of Commerce (OBC) and United Bank of India (UBI) will start operating as the branch offices for Punjab National Bank (PNB) with effect from 1 April 2020.
- The branch offices of Syndicate Bank will start operating as the branch offices for Canara Bank with effect from 1 April 2020.
- The branch offices of Allahabad Bank will start operating as the branch offices for Indian Bank with effect from 1 April 2020.
- The branch offices of Andhra Bank and Corporation Bank will start operating as the branch offices for Union Bank of India with effect from 1 April 2020.
Frequently Asked Questions (FAQs)
- What happens to my bank account number and customer ID after my bank gets merged with another bank?
- What happens to the standing instructions for utility payments after the merger of my bank with another bank?
- What happens to the home branch of my bank which just got merged with another bank?
- What is branch rationalisation?
- What happens to the standing instructions for my loan EMI payments, credit card payments, and RD instalment payments?
As per the FAQs cited in relation to the amalgamation of UBI and OBC with PNB, customers will be able to continue using the same customer ID, account number, IFSC, debit card, cheque books, MICR, and so on after the merger. However, a new account number and customer ID is likely to be issued for the customers in the future.
There will no disruptions in regard to these services. There will be no requirement for the resubmission of mandate. The services will be carried forward seamlessly.
After the merger, you will have access to a greater number of ATMs and branch offices for your service requirements. However, branch rationalisation is a possibility which should be kept in mind.
If the home branch of your bank is in a locality where the branch office of the acquiring bank also has a branch in very close vicinity, it is highly likely that the acquired bank’s branch will be shut down.
Just like the standing instructions for the payment of utilities, the payment for loan EMIs, RD instalment payments, and credit card payments will also be carried on seamlessly. In case, the credentials change in the future, you will be required to update them.