PNB, UBI, OBC merger: Six months needed for HR and IT integration

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Published: September 15, 2019 1:37:10 AM

An “Interactive Meet” was organised here on Saturday with the Kolkata-based field functionaries of UBI, PNB & OBC. Customers of the three banks also attended the meet.

PNB, UBI, OBC, bank merger, IT integration, HR integration, Punjab National Bank, Oriental Bank of Commerce, United Bank of IndiaPNB will be the anchor bank for the merged entity.

With Punjab National Bank, Oriental Bank of Commerce and United Bank of India merging to become the second-largest public sector bank in the country, likely from April 1, 2020, integration of HR & IT operations of the amalgamated entity is expected to take at least six months time after merger.

An “Interactive Meet” was organised here on Saturday with the Kolkata-based field functionaries of UBI, PNB & OBC. Customers of the three banks also attended the meet. Several issues were raised at the meeting by employees and customers, which included integration of HR & IT of the amalgamated entity.

“After the completion of the merger process, over six months time may be needed for the integration of HR & IT services of the merged entity. This cannot be done overnight. A lot of training has to be done,” PNB general manager Chander Khurana told reporters after the meeting. PNB will be the anchor bank for the merged entity. Combined staff strength, post the amalgamation, will be over one lakh.

UBI MD & CEO Ashok Kumar Pradhan said after the merger, bank branches would be ‘rationalised’. “It will happen naturally,” Pradhan said. Pradhan said the new organisation will be equipped by sufficient funds to finance large projects. With PNB and UBI getting around Rs 16,000 crore and Rs 1,600 crore capital infusion, respectively, from the government before the proposed merger, the merged entity’s capital adequacy ratio would be over 13%.

The lenders have formed as many as 23 working groups for various functional areas, including products, processes, human resources, credit and bad loans, with participation of top officials from the three banks. This will streamline the process of amalgamation.

Bank officials clarified that there has been “no restrictions” on any of the three banks for fresh lending before the merger takes place. Pradhan said UBI was aiming to come out of the RBI’s Prompt Corrective Action (PCA) framework in the second quarter of the current financial year. “Prior to the merger, if UBI gets any offer for big-ticket loan but cannot disburse it due to the PCA, the other two banks will come forward to support,” said Khurana.

On the share swap ratio of the three-way bank merger, Pradhan said valuers would be appointed separately, following which a merchant banker would determine the fair value. And after that, the swap ratio would be decided.

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