Harmonisation of products, both on the loan and deposit sides, has been completed and the same products will be offered to all customers, Indian Bank Managing Director and CEO Padmaja Chunduru said.
Following the merger, Indian Bank will become the seventh largest public sector lender.
The merger is part of the government's mega consolidation plan to amalgamate 10 state-run banks to create four global-sized lenders, beginning next financial year.
"Tomorrow is day one and the initial processes are complete. The main thing is about the customer service and there won't be any disruption for customers of both the banks," Chunduru told in an interview.
She said all the deposit and loan products, including access to Indian Bank's emergency credit lines launched in the wake of Covid-19, would be made available to the customers of Allahabad Bank.
Chunduru said amalgamation consists of integration of products and processes, information technology and human resources.
"We have focused all our resources on the important things that matter for day one -- treasury integration has happened and IT integration, to the extent of product harmonization and rolling out of the same products, has happened," she said.
She expects the entire IT integration to be completed by December 2020.
Integration of HR is an ongoing process and will take another three to four months, she explained.
The combined entity will have 6,060 branches, a network of 2,870 ATMs and banking correspondent network of 9,000.
She said none of the branches will be closed and about 150 to 200 branches have been identified that would either be merged or shifted in terms of location.
"As a combined entity, Indian Bank's balance sheet is much stronger. We can offer higher amount of loans to the corporate segment, and will be able to invest in the required skill sets, whether it is credit management or recovery or risk management, to bring in more differentiated products and more value added services and also on the digital front," she said.
Post-merger, the bank will not require capital on an immediate basis, she added.
Chunduru further said the merged entity will retain Allahabad Bank's stakes in two firms -- a general insurance firm and an asset reconstruction company.
"Indian Bank is going to inherit both the subsidiaries. After tomorrow, we will have a look at the whole thing and then see how to take it forward," she said.
Allahabad Bank holds 28.52 per cent in Universal Sompo General Insurance Company. Other investors include Indian Overseas Bank, Karnataka Bank, Dabur Investment and Japanese insurance major Sompo Japan Nipponkoa Insurance Inc.
It also holds 27.04 per cent equity stake in asset management company ASREC (India) Ltd, along with other banks/ institutions.
There are three other mergers of public sector banks under the government's mega consolidation plan.
Punjab National Bank will take over Oriental Bank of Commerce and United Bank of India to form the nation's second-largest lender; Syndicate Bank will merge with Canara Bank; and Andhra Bank and Corporation Bank will get amalgamated into Union Bank of India.
Following the consolidation, there will be seven large public sector banks, and five smaller ones.
There were as many as 27 state-run banks in 2017 when SBI took over five of its associates and Bharatiya Mahila Bank. In 2019, Vijaya Bank and Dena Bank got merged with Bank of Baroda, making it the third largest state-run bank. HV SHW ABMABM