The amalgamation of 97-year-old Andhra Bank and 114-year old Corporation Bank with 101-year-old Union Bank of India will become effective from April 1. The merger will create India’s fifth largest public sector bank. In an interaction with BusinessLine , Rajkiran Rai G, MD and CEO, Union Bank, said almost 80 per cent of the basic transactions that customers routinely do will be available at all branches of the consolidated bank. Full technology integration, however, could take up to a year. Rai emphasised that customers of the consolidated bank will benefit by way of extra services and none of the services will be withdrawn. Excerpts:

Given that the merger comes in the backdrop of Covid-19, do you see any operational hitch?

Technically, the merger process has already been completed. I don’t see any issue. Technology integration is likely to take some time. We are rationalising some of the products. On the advances side, we are not doing much because there should not be any discomfort to the customer or the branch-level staff. So, we will slowly make changes so that the transition will be gradual and smooth.

The training and transition, which we had earlier planned, have been pushed back because of this issue (pandemic). This is a very special situation that we are in. So, at this point of time, we should not be doing anything that will inconvenience the staff and customers. At the customer and staff levels, we are keeping things very comfortable. As things stabilise, we will gradually push for the integration.

I had discussions with the top managements of both Andhra Bank and Corporation Bank at their headquarters to understand the issues. I think now things are very smooth. I don’t foresee any problem as such.

When will the technology integration be complete?

Generally, the integration (of the three banks) is complete when the technology platform becomes one. So, we are expecting the integration to happen in nine to 12 months.

Once this happens, if you go to any branch, it will be the same (services/ transactions). This is the ultimate goal. To begin with, on April 1, you can walk into any branch of the three banks and carry out minimum transactions. You can walk into Andhra Bank and operate a Union Bank account. Similarly, you can walk into Corporation Bank and operate an Andhra Bank account. So, you can do basic (interoperable) transactions such as cash transactions and fund transfers at any of these bank branches. We have developed this connectivity/ interoperability. What this means is that 75 to 80 per cent of the transactions that customers generally do can be done at any of the branches. We will provide this facility from day 1.

How about deposits and advances?

On the deposits side, all three banks will offer the same products and same interest rate. All ATMs will be connected. And we have a common call centre. These will be available from day one. Interest rate rationalisation on all advances also will happen on day one. Now, the three banks have three different interest rates on different loans. So, that will get rationalised on April 1.

So, certain things that can easily be done on April 1 have been carried out. We have a much superior advances processing centre. Now, before a new loan product is introduced, the branch manager (of the merged banks) has to be trained on the data feeding, which happens at the branch level. The manager has to feed certain details about the borrower. That needs training. So that (training) we have pushed it back slightly.

Assuming that things get normal later this month, we will train them and introduce these products in May-June. Until then, Andhra Bank and Corporation Bank will continue with their existing system of loans. To help our customers cope with the Covid-19 impact, we are sanctioning 10 per cent extra working capital limit. For enhancing this, there are certain processes. Now, if Andhra Bank and Corporation Bank have a particular system of working and we suddenly introduce changes, they may find it difficult to adapt. So, they are comfortable with a particular system, and we are continuing with that.

In this situation, where people need credit/ temporary relief, we don’t want to change the system. So, for the staff who are at the front-end, there should not be any disturbance by way of a new system. And for customers also, for the service part, there should not be any issues. So, they are going to benefit from the extra services. None of the services will be withdrawn. There is no change in the account number. They is need not change the credit card, cheque book. I think there is absolutely no issue for the customer. So, things should be smooth.

How are your staff coping with operations in this pandemic? Is there demand for credit at all?

My sincere appreciation to all staff members as even in this life-threatening situation they are opening branches and serving customers. This is something great. They rose to the occasion even during the demonetisation period. The staff are coping up, but we have asked them to stay safewith minimum branches to be opened. Now, after the lock down, customer visits to branches have come down substantially. At this point of time, small credit processing and sanctions have taken a back seat.

Now, branches provide only essential services. Customers are also not demanding. It is more of the existing customers who are looking for relief. For example, someone who has ₹1-crore working capital, is stuck now; his money is not coming as there is no collection. So, the customer is looking for additional funds for paying salaries. We are taking care of this demand. We have allowed 10 per cent of the working capital limit as extra demand loan. Most of the banks have introduced this product.

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