The merger of state-run lenders Punjab National Bank (PNB), United Bank of India (UBI) and Oriental Bank of Commerce (OBC) will come into effect from April 1 next year, a top official said on Saturday. The merged unit, likely to have a new name, will be the second largest bank in the country after State Bank of India (SBI) with a total business volume of Rs 18 lakh crore. "The amalgamation process will take some time and the new entity will start functioning from April 1, 2020," said Ashok Kumar Pradhan, managing director and CEO of United Bank of India (UBI).
The three banks held a customer meeting here, which was attended by Chander Khurana, GM of Punjab National Bank, and Binay Kumar Gupta, GM of Oriental Bank of Commerce. The lenders said that there will no retrenchment of staff in the merged entity, and also ruled out the possibility of bringing in Voluntary Retirement Scheme (VRS).
Mr Pradhan later told reporters that the combined staff strength after the amalgamation will be 1 lakh with 11,400 branches.
Finance Minister Nirmala Sitharaman had on August 30 announced the consolidation of 10 state-run banks into four large-scale lenders.
Mr Pradhan said the amalgamation process will require legal and regulatory compliances, besides approval of the boards of the three public sector banks.
"During the interim period, the three will continue to function independently," he said.
The government has already announced a capital infusion of Rs 16,000 crore into PNB and Rs 1,600 crore into UBI.
"The merged entity will be adequately capitalised and comply with basel requirements for the next three years," the senior UBI official said.
To a query, Mr Khurana said the average net non-performing assets of the three banks are 6.67 per cent, which is expected to fall below 6 per cent after the amalgamation.
On the share-swap ratio, Mr Pradhan said that valuers will be appointed separately, following which a merchant banker will determine the fair value.
"After that, the swap ratio will be decided," he said.