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Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank of India (UBI), which are in the process of getting amalgamated, have together identified about 500 overlapping branches across the country that can be rationalised.
“Our objective is not to close down branches. At the same time, we cannot run branches that are side by side. So, what we will do is to first rationalise the branches of the three banks located with 500 metres of each other before June 30.
“There is overlap of branches across the country. But in the northern part – Punjab, Haryana and Uttar Pradesh – it is more. It could be about 500 branches,” said SS Mallikarjuna Rao, MD and CEO, PNB
Rao emphasised that the branch licences so released will be utilised elsewhere. The merger of the three banks, which is expected to be effective from April 1,will result in the creation of India’s second largest public sector bank with over ₹18-lakh crore business size, 11,000 branches, and 1.05 lakh employees.
From July 1, the merged bank will study more comprehensively the issue of rationalisation based on the business. “So, that (rationalisation) is not a fast-track requirement at this point of time. It will be undertaken over a period of time. Maybe, we will achieve that by March or April 2021,” explained Rao.
Merger update
The PNB chief said the pre-migration activity is on track. In September 2019, 34 committees, such as those related to business, process, products, and risk-governance structure, were formed – 18 headed by general managers (GMs) of PNB; 12 by GMs of OBC, and 4 by GMs of UBI.
These committees gave their recommendations in December 2019. “We engaged EY early last month as a project management consultant covering the entire amalgamation process. The recommendations of the 34 committees have been shared with the consultant to fine-tune them and, accordingly get the process approved by the board, so that on April 1 the new policies approved by the bank will be applicable for the merged entity,” said Rao.
Share-swap ratio, once finalised, will be put in public domain for the benefit of the minority shareholders. “We have already formed a grievance redressal committee to address grievances of minority shareholders,” said Rao.
Altogether, the merged bank will have around 160-170 circles, ensuring leadership continuity involving the three banks. If the leader in circle belongs to one bank then the second layer will belong to the other two banks.
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