State Bank of India Chairman Rajnish Kumar has said that 10 public sector banks that are on verge of merger need to "very" careful when it comes to technology integration. Maintaining that one of the key challenges for PSBs would merger process, Kumar said they needed to be careful on IT integration.
"One of the challenges before public sector banks in the near future is the merger of the bank...IT merger needs to be handled very carefully," Kumar said at an event organised by Indian Banks' Association, reported PTI.
Union Finance Minister Nirmala Sitharaman in August last year unveiled a mega plan to merge 10 public sector banks into four as part of plans to create fewer and stronger global-sized lenders as the government looked to boost economic growth from a five-year low.
The four mergers are PNB (Punjab National Bank) will amalgamate with itself smaller peers Oriental Bank of Commerce and United Bank of India, to create the nation's second- largest lender; Syndicate Bank will merge with Canara Bank; Union Bank of India will take over Andhra Bank and Corporation Bank; and Indian Bank will merge with Allahabad Bank.
The move will bring down the number of state-run banks to 12 from 19 after the merger of Dena Bank and Vijaya Bank with Bank of Baroda effective April 2019. As of April 20-17, there were 27 state-run banks in the country, right before the SBI merged with itself its five associate banks -- State Bank of Bikaner and Jaipur, State Bank of Patiala, State Bank of Travancore, State Bank of Hyderabad, State Bank of Mysore -- along with the Bharatiya Mahila Bank.
The four new set of proposed mergers included Punjab National Bank, Oriental Bank of Commerce and United Bank of India will combine to form the nation's second-largest lender; Canara Bank and Syndicate Bank will merge; Union Bank of India will amalgamate with Andhra Bank and Corporation Bank; and Indian Bank will merge with Allahabad Bank. These mergers will bring the number of state-run banks to 12 as against 27 in 2017.