Money & Banking

Merger of 3 PSBs — structurally and culturally

K Ram Kumar Mumbai | Updated on December 22, 2019

At a two-day summit in Kerala recently, top management of Union Bank of India, Andhra Bank and Corporation Bank met to address the challenges

To manage cultural integration in the run-up to their amalgamation, Union Bank of India, Andhra Bank and Corporation Bank have zeroed in on the ‘best of three approach’ so that, post-amalgamation, the unified Bank is primed to handle double the volume of business in the next few years vis-a-vis what they are doing now.

At a two-day mega leadership summit, christened ‘Triveni Sangam’ (confluence of three rivers), held at the idyllic coastal town of Kovalam in Kerala recently, the top management of the three public sector banks unanimously agreed on creating an organisational structure and culture that will imbue the ‘best of three’ spirit.

The summit examined the possibility of a revamp of the administrative layers to handle ₹15-lakh crore business (deposits plus advances), which is expected to double in the next few years. As at March-end 2019, the three public sector banks collectively had a business of ₹14.59-lakh crore.

Top leadership of the three banks, including Rajkiran Rai G (MD & CEO, Union Bank of India), J Packirisamy (MD & CEO, Andhra Bank), PV Bharathi (MD & CEO, Corporation Bank), Executive Directors and General Managers underscored the need to create a symphony for harmony for the amalgamation, which will create India's fifth largest public sector bank.

The Union Bank, Andhra Bank and Corporation Bank amalgamation, which was announced by the government on August 30, 2019 as part of the amalgamation of 10 public sector banks into four, is expected to be effective from April 1, 2020.

People, process and technology

Emphasising that the amalgamation activity is based on the merger of three important tenets of an organisation — people, process and technology — Rai said: “The challenge for the banks has been the merger of people or the human resources, who are the driving force for any service-oriented organisation.

“Cultural differences and managing cultural integration are major challenges in achieving the synergies in amalgamation. Hence, we organised the leadership summit to address these issues.”

The Union Bank chief observed that the amalgamation journey started with devising a three-year strategy for the amalgamated entity and preparing the road map for the amalgamation. Based on the roadmap, 30 functional groups, comprising members from the three banks, covering various activities/areas have been formed.

Rai said progressively the banks have been successful in harmonising many products, processes and policies till now.

Prior to the mega leadership summit, the banks addressed the stakeholders, including employees and customers, through various town hall meetings in Chennai, Hyderabad, Vijayawada, Benaluru, Mangalore and Ahmedabad. The apprehensions and questions related to the merger were jointly handled by the MD & CEOs of the three banks at these meetings.

Rai explained that the three major objectives of the summit were: getting to know each other as a leadership team; building a shared understanding and a common vision and shaping their culture to achieve the vision.

The banks are now planning to hold similar cultural integration workshops for deputy general managers, assistant general managers and other staff members down the line along with town hall meetings at various centres to not only integrate culturally but also to transform the organisation into a robust and sound one.


Published on December 22, 2019

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