The merger of Indian Bank and Allahabad Bank will result in over 10,000 branches and combined business of Rs 10 lakh crore in the next two-three years.
As of December 2019, the total business of Allahabad Bank was around Rs 3.9 lakh crore, whereas that of Indian Bank was close to Rs 4.5 lakh crore. The merged entity will emerge as the seventh-largest public sector bank with a business of Rs 8.08 lakh crore (approx 1.9 times of pre-merged Indian Bank) and will have about 43,000 employees.
Allahabad Bank official told Business Standard that they are awaiting for government's notification on the merger and is ready to meet April 1 deadline. The official added that it would take at at least a year to complete the integration of the core banking system (CBS). Post-merger, none of the branches will be closed. However, branches that are at closer proximity will be combined.
Under the mega merger plan by Union Finance Minister Nirmala Sitharaman, 10 public sector banks would be consolidated into four. The government's big bang bank reform comprises the amalgamation of Punjab National Bank, Oriental Bank of Commerce and United Bank; Canara Bank and Syndicate Bank; Union Bank of India, Andhra Bank and Corporation Bank; and Indian Bank and Allahabad Bank. The consolidation exercise will bring down the number of nationalised public sector banks to 12 from 27 in 2017. The Modi government has given April 1 deadline for the amalgamation of 10 public sector banks into four units.