Bank Merger: Account, Interest, Loans and Branch- What Will Change, What Not For Customers
Nirmala Sitharaman announced creation of four large entities after merger of 10 public sector banks (Image: PTI)
The government on Friday unveiled a mega plan to merge 10 public sector banks into four. The mega bank mergers are a continuance of the government’s attempt to consolidate the public sector banks. Union Finance Minister Nirmala Sitharaman on Friday announced creation of four large entities after merger of 10 public sector banks.
At a media briefing, she said Oriental Bank of Commerce and United Bank will merge with Punjab National Bank to create the nation's second-largest lender behind State Bank of India. Also, Syndicate Bank will merge with Canara Bank while Andhra Bank and Corporation Bank would subsume into Union Bank of India, and Allahabad Bank will be amalgamated with Indian Bank.
The mergers announced on Friday, together with two set consolidations done last year, will reduce the number of public sector banks to 12 from 27 in 2017.
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These mergers will aim to create fewer and stronger global-sized lenders with robust balance sheets with an aim to boost credit and spur growth. However, the mergers will also have a range of impact on the customers of these 10 public sector banks.
Let's take a look at what will change and what won't for the customers of these banks after the mergers:
What May Change
- Customers may get new account numbers and customer IDs. They will also get new associated IFSC codes for their home branch. Your home brach may change also.
- The existing customers of these banks may be issued new cheque books and debit/credit cards after the merger process is done.
- Customers will have update their new account, IFSC or other details with the income tax department, insurance providers, mututal funds, national pension scheme etc.
- People who have EMIs or systematic investment plan (SIP) with these banks may need a fresh bank mandate. They will have to fill a new instruction form for this purpose. They may also have to issue fresh standing instructions for bill payments.
- The interest rate for your savings account rate may change.
What Won't Change
- The fixed deposit or recurring deposit rates will remain unchanged for now.
- Your loan rates will remain unchanged. In case of MCLR-based loans, the interest would be reset at the end of the reset period.
First Published: Friday, August 30, 2019 10:26 PM