From April 1, 2021 customers of eight banks that have been merged with five different banks can't use the cheque books, IFSC and other details of their old banks.
From April 1, 2021 customers of eight banks that have been merged with five different banks can’t use the cheque books, IFSC and other details of their old banks. The mergers will be of – Corporation Bank and Andhra Bank with Union Bank of India, Oriental Bank of Commerce and United Bank of India with Punjab National Bank, Syndicate Bank with Canara Bank, Allahabad Bank with Indian Bank and Dena Bank and Vijaya Bank with Bank of Baroda.
While the account numbers of the existing customers of Corporation Bank, Andhra Bank, Oriental Bank of Commerce, United Bank of India, Syndicate Bank and Allahabad will remain the same even after the merger, that of the customers of Dena Bank and Vijaya Bank will change along with other details.
So, what the customers of banks that got merged with other banks need to do for lump sum investments?
As the cheques of erstwhile banks can no longer be used, investors can’t use such cheques from April 1, 2021 for lump sum investments in any financial product or for starting a Systematic Investment Plan (SIP) in any of Mutual Fund (MF) schemes.
But will the mergers result in discontinuation of existing SIPs?
Sharing his experience, Air Veteran Joginder Kaushik, who is now working as a Mutual Fund Distributor (MFD) at Bhiwani, Haryana and has many Defence Personnel as his clients, said, “SIPs of none of my clients have stopped after their transfer as they got their accounts transferred in the same bank at the new place. The required details automatically got updated at the AMC end without any intimation from the clients.”
Such account transfers result in continuation of the same account number, but IFSC and other details get changed.
What will be the effect of change in the banks of the investors after the mergers?
Talking on bank merger, Kaushik said, “Even after the merger of State Bank of Patiala with State Bank of India (SBI), SIPs of none of my clients, who had accounts in State Bank of Patiala, stopped as account numbers remain the same.”
So, for the investors, whose account numbers remain the same after the mergers, SIPs would continue unaffected without any intervention.
But what about the customers of Dena Bank and Vijaya Bank?
“They have to update their bank mandate to ensure continuation of existing SIPs,” said Kaushik.
To update the existing bank mandate or to register a new mandate, such investors need to contact either the MFDs or Financial Advisors they are associated with or to the respective Asset Management Companies (AMCs) or their Register and Transfer Agents (RTAs).