The merged entity of Allahabad Bank and Indian Bank will register a business of ₹10-lakh crore in the next two years. The combined entity is also looking to scale up its branch network to 10,000 in the same period.

As on March 2019, Indian Bank and Allahabad Bank’s combined business is estimated to be close to ₹8-lakh crore. Their branch network put together is close to 6,104. The combination of these two banks is believed to become the seventh-largest lender after the merger.

Allahabad Bank had a total business of ₹3.77-lakh crore as on March 31, 2019. Deposits were at ₹2.14-lakh crore, while advances were close to ₹1.63-lakh crore. Indian Bank’s total business stood at ₹4.29-lakh crore with deposits of around ₹2.42-lakh crore and advances of ₹1.87-lakh crore.

“We have a plan to expand the total branches of the merged entity to 10,000 and register ₹10-lakh crore business in another two to three years. We are very positive on that,” a senior official of Allahabad Bank told BusinessLine on conditions of anonymity.

Though branch rationalisation initiatives will be undertaken as a part of the merger process, however, none of the Allahabad Bank branches will be closed down, particularly in the eastern and northern regions of the country, where the bank has a good presence when compared to Indian Bank, which has a significant presence in the south.

“In our case, the greatest advantage is none of the branch is going to be closed. Only those branches that are just adjacent to each other will be combined,” he said.

Merger on track

The harmonisation of banking products, policies and processes for the proposed merger of the two banks has been proceeding smoothly, and the lenders are positive about meeting the April 1 deadline, which has been set as a probable effective date for the mega consolidation of the 10 public sector banks.

There were some speculation and reports suggesting a possible delay in the implementation of the merger plans. However, Finance Minister Nirmala Sitharamanrecently allayed those fears and said that there was no uncertainty on the proposed merger of public sector banks.

The Allahabad Bank official also confirmed that there were no issues regarding HR integration. “We are discussing with everybody. We are meeting the customers also, telling them not to be worried over the merger,” he said.

However, the process of integration will take around 12 to 18 months. “It is basically a horizontal merger. It does not take a lot of time. But the process of complete integration will take time. It will not happen overnight, it will take at least 12 to 18 months for us for complete integration of all the processes. Very few of the processes will be merged from day one (of the merger) as complete integration of core banking system (CBS) will not happen from day one,” he pointed out.

Both banks have a common core banking platform, BaNCS, developed by TCS.