In 2019, the Central government took a decision to amalgamate the various public sector banks (PSBs) in the country. Come April 1, the 114-year-old Mangaluru-headquartered Corporation Bank will also become a part of the amalgamated entity of three banks – Corporation Bank, Union Bank of India and Andhra Bank. This process will make the amalgamated entity the fifth-largest PSB in the country.
To get an idea about the amalgamation process and issues related to that, BusinessLine spoke to PV Bharathi, Managing Director and CEO of the bank. Excerpts:
What are the latest developments in the amalgamation process?
The amalgamation process is going ahead quite smoothly and is on schedule. As far as the process is concerned, we have a governing structure for the smooth execution, review, and monitoring of the amalgamation process. The apex-level committee is the supervisory committee of the board, followed by the committee of MD and CEOs, steering committee of Executive Directors, implementation and monitoring committee of General Managers, and functional committees of Deputy General Managers and Assistant General Managers.
The committees meet at regular intervals to discuss the progress and to take appropriate actions. We have successfully harmonised many products, processes and policies till now.
Apart from this, the top management of all three banks have been holding town hall meetings at various centres to address employees and customers to ensure smooth transition.
What was the outcome
of these sessions?
All of us interact at regular intervals as per the governing structure created for the smooth amalgamation process. A Master Amalgamation Plan, consisting of actionable items, has been prepared with proposed timelines, where all activities critical to amalgamation have been prioritised.
Further, the bank has also conducted a leadership summit of the executives of all three amalgamating banks to discuss the amalgamation plans and strategy to increase the volume of business.
During the meeting, the top management of all three banks unanimously agreed to create an organisational structure and culture that will imbibe the best of the three.
How beneficial will the amalgamation be
for stakeholders?
The amalgamation of Union Bank of India, Corporation Bank and Andhra Bank will create the fifth-largest public sector bank, with a business size of more than ₹14.6-lakh crore. From the fifth position, we are aiming at the fourth position by the end of FY22.
The amalgamation will also provide impetus for the adoption of best practices among banks to improve customer services, productivity and staff welfare.
The economies of scale and scope are expected to translate into better profitability, wider product offerings, adoption of state-of-the-art technology, better pricing of products and, ultimately, reduced cost of financing. Enhanced access to banking services through a stronger and wider network will help support and service a larger client base.
What are the challenges
for the bank in the amalgamation process?
How are you planning
to handle them?
The amalgamation activity is based on the merger of three important areas of an organisation – people, processes, and technology. As far as the technology platform is concerned, we all are on the finacle platform. Although the software system is the same, versions are different.
Therefore, technology upgradation may take some time. While the products are similar in almost all the banks, some tweaking may be required and we are working on the same.
We have already decided that the best of HR practices will be adopted across the amalgamating banks, and staff welfare measures will be implemented based on the best of three.