Mega-Merger Of PSU Banks: RBI Says Merger Comes Into Force From April 1st, Despite #Coronavirus Lockdown
Ignoring the Coronavirus lockdown, the RBI has announced that the merger will still take place on the set date, April 1, 2020.
Major PSUs were scheduled to be merged on April 1, 2020, and ever since the decision has been announced, it has faced a multitude of resistance from bank unions.
However, due to the unforeseen outbreak and spread of Coronavirus, there was a dilemma if the merger would be postponed or not.
RBI Announces Major PSUs To Be Merged Despite Coronavirus Lockdown
Despite the lockdown announced by the Government about the Coronavirus, the Reserve Bank of India hasnt budged from its decision to merge the PSUs on April 1. The bank has also issued four separate individual releases, which announces that from the next month, the branches of the banks that will be merged will operate as of the banks in which these have been amalgamated.
In the statement, RBI said, “The Amalgamation of Oriental Bank of Commerce and United Bank of India into Punjab National Bank Scheme, 2020 dated March 4, 2020, issued by the Government of India… The scheme comes into force on the 1st day of April 2020.”
This comes just after Finance Minister Nirmala Sitharaman announced that the mega bank consolidation plan will be executed as planned, and will take place on April 1.
The government had announced a consolidation plan, a part of which was the amalgamation schemes for 10 state owned banks into four larger banks in order to create bigger size stronger banks in the public sector.
Ten Major PSUs To Be Merged Into Four By The RBI
As per the plan of the merger, Oriental Bank of Commerce and United Bank of India will be merged into Punjab National Bank; Syndicate Bank into Canara Bank; Allahabad Bank into Indian Bank; and Andhra and Corporation banks into Union Bank of India.
Under this, the branches of Oriental Bank of Commerce and United Bank of India will be working as branches of Punjab National Bank from April 1, 2020, and branches of Syndicate Bank as that of Canara Bank, the RBI said in a separate releases.
Additionally, the Allahabad Bank branches will operate as those of Indian Bank while the branches of Andhra Bank and Corporation Bank will function as the branches of Union Bank of India from the beginning of next fiscal year 2020-21, the RBI said.
The bank officers’ unions havent been happy about the merger, and wrote a note to the prime minster asking to postpone the merger schemes of the banks. However, that has been ignored completely.