The merger of state-run lenders Punjab National Bank (PNB), United Bank of India (UBI) and Oriental Bank of Commerce (OBC) will come into effect from April 1, 2020. During the interim period, the three banks will continue to function independently.
It is expected to have a new name of the merged entity and also will be the second-largest bank in the country.
The first largest bank is State Bank of India (SBI) with a total business volume of Rs 18 lakh crore.
Ashok Kumar Pradhan, MD and CEO of United Bank of India (UBI) said “The amalgamation process will take some time and the new entity will start functioning from April 1, 2020.”
The customer meeting was held in Kolkata of the three merging banks, which was attended by Chander Khurana, GM of Punjab National Bank and Binay Kumar Gupta, GM of Oriental Bank of Commerce.
It was said in the meeting that there will no retrenchment of staff in the merged entity, and also ruled out the possibility of bringing in Voluntary Retirement Scheme (VRS).
The senior UBI official said, “The merged entity will be adequately capitalised and comply with Basel requirements for the next three years,”.
Mr. Pradhan told that the combined staff strength post the amalgamation will be 1 lakh with 11,400 branches.
Recently, the government has already announced a capital infusion of Rs. 16,000 crore into PNB and Rs. 1,600 crore into UBI.
Earlier in August also, Finance Minister Nirmala Sitharaman had announced the consolidation of 10 state-run banks into four large-scale lenders.
Currently, the average net NPA of the three banks is 6.67 per cent. However, post amalgamation, it is expected to fall below 6 per cent.
Further said by Pradhan that valuers will be appointed separately, following which a merchant banker will determine the fair value. “After that, the swap ratio will be decided,”