With many Indian businesses and markets impacted due to the Covid-19 pandemic, the banking services as well are impacted as a lockdown has been announced across the country.
The Bank officers’ union on March 25, requested Prime Minister Narendra Modi to defer mega merger exercise of banks in the wake of the Novel coronavirus outbreak.
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Amalgamation of Banks Postponed?
Earlier this month, the Union Cabinet approved amalgamation of 10 public sector banks (PSBs) into 4with effect from April 1, 2020.The process involves The United Bank of India and Oriental Bank of Commerce to be merged with Punjab National Bank, making the proposed entity the second largest public sector bank. The decision was made to merge Syndicate Bank with Canara Bank, while Allahabad Bank with Indian Bank. Meanwhile, Andhra Bank and Corporation Bank are to be merged with Union Bank of India.
The letter written to PM Modi by the All India Bank Officers’ Confederation (AIBOC) read, “The finance minister yesterday announced a slew of measures in view of the deleterious effect of the contagion. We are also expecting an extension of closing related activities and the revision of the closing date itself from March 31 to June 30, which is the need of the hour.”
With reference to the slew of measures announced by the Finance Minister, AIBOC asked the PM to take into consideration the process of merging of 10 public sector banks scheduled with effect from April 1, 2020 also be postponed as conclusion would be a difficult proposition during the lockdown. On March 23, PM Modi announced a nationwide lockdown of 21 days to avoid the spread of the virus.
It also read, “As a progressive trade union, we strongly feel that the priority before the country is to come out from the colossal threat of loss of precious human lives, which is unprecedented in independent India and repair the damages being caused to the national economy as a natural fallout of the Coronavirus endemic.”
Why is the Proposal for Postponing the Process Being Put Forth?
The entire process of amalgamation of banks involves numerous tasks requiring constant interaction and congregation of the employees of the anchor and target banks and representatives of outsourced consultants, agencies among others.
These tasks in the current state of affairs are unjustified particularly as the government is aiming at ‘break the chain’ to combat the spread of the contagious disease.
If the merger process is initiated, thousands of bank employees, officers and executives involved in the process will be required to be in attention thus exposing themselves to the risk of contamination and risking their lives.
The letter said, “It may be argued that these activities can be carried out through video conferencing, but it should be borne in mind simultaneously that these are complex tasks, where apart from video conferencing, several meetings will also be required to be held among the rank and file of the banks involved in order to ensure accomplishment of the job of assimilation and integration of the systems and processes.”