Coronavirus: Pressure mounts on govt to defer PSB merger amid lockdown

Banks working towards merging balance sheets before April 1

Pressure is mounting on the government to postpone the merger of public sector banks amidst 21-day nationwide lockdown which began on Wednesday and will continue till April 13. The merger deadline is set at 1st April, 2020.

According to the chief of one public sector bank, several representations are being made by industrialists to defer the merger, as after the lockdown is lifted there would be tremendous stress on several sectors and individual banks would be in a better position to take a view of the situation.

The chief of another public sector bank also said informally that the proposal of deferment of merger is being discussed. However, it is up to the anchor bank to discuss the matter with the government, the banker added.

On Wednesday, the All India Bank Officers’ Confederation (AIBOC), the largest supervisory cadre trade union in the banking industry, in a letter to the Prime Minister Narendra Modi, requested the revisit the decision of merger.

“The entire exercise of merger process involves huge number of tasks requiring constant interaction and congregation of the employees of the anchor and target banks and representatives of outsourced consultants, agencies etc., which in the current state of affairs is unwarranted particularly in view of the ‘break the chain’ effort undertaken by the government to combat the spread of the fatal disease,” according to the letter.

Notably, the banks are running with a bare minimum staff to carry out day-to-day services. However, the banks agree that they are working towards a balance sheet merger by April 1, it has to be a very low key affair. The bank offices and ATMs are unlikely to see any change in name or logo.

Last week, Padmaja Chunduru, MD and CEO of Indian Bank, with which Kolkata-based Allahabad Bank will be merged, said the merger process was on track.

“We are gearing up for the amalgamation, despite all the concerns which Coronavirus is causing. We are taking all steps to ensure, employees and customers are safe and services are uninterrupted,” she had said.

Over the last two weeks the banks have been trying to find out ways to reduce the number of face to face meetings as a run up to merger with online sessions.

“Despite absence of transport, logistics, food supplies, all employees and officials of the entire banking industry have been rendering delivering essential banking services to the citizenry risking contamination of themselves and in turn their families. Incidents of our officers getting beaten up while travelling for reporting for duty by the police have also surfaced from some corners,” AIBOC said in its letter to the Prime Minister.