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Indian Banks' Association (IBA) on Friday said Union Bank of India's MD and CEO <keyword id="4360345" type="PERSON" weightage="20" keywordseo="Rajkiran-Rai">Rajkiran Rai</keyword> G has been elected as the association's chairman for the term 2020-21. "The managing committee of IBA at its meeting held on October 16, 2020 elected Rajkiran Rai G, Managing Director and CEO, Union Bank of India as the chairman, IBA for the term 2020-21," a release said. State Bank of India's Chairman <keyword id="1937145" type="PERSON" weightage="20" keywordseo="Dinesh-Kumar-Khara">Dinesh Kumar Khara</keyword> has been elected as the deputy chairman of the association. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/hdfc-bank-q2-earnings-impact-by-moratorium-restructuring-and-npa-loans/articleshow/78702092.cms">HDFC Bank likely to remain ahead of peers in second quarter — all eyes on loan restructuring, moratorium, and asset quality</a> <a href="https://www.businessinsider.in/careers/news/hcl-to-hire-more-jobs-and-increase-wages-over-next-three-months-9000-more-freshers-to-be-onboarded-by-march/articleshow/78696285.cms">HCL Tech to hire ‘significantly’ and bring back wage hikes over the next three months — 9,000 new freshers likely to be onboarded by March</a> <a href="https://www.businessinsider.in/business/corporates/news/hcl-tech-beats-guidance-clocks-in-4-5-jump-in-revenue-during-second-quarter/articleshow/78693542.cms">HCL Tech beats guidance — clocks-in 4.5% jump in revenue during second quarter</a>

Union Bank of India MD & CEO Rajkiran Rai is new chairman of IBA

Mumbai, Mar 29 () State-owned Union Bank of India, which is amalgamating Andhra Bank and Corporation Bank with it, hopes to reap cost benefits of over Rs 2,500 crore through rationalisation of branches and savings on technology on the combined entity. The amalgamation of the three banks, which will be effective from April 1, is part of the government's mega consolidation of 10 public sector banks to create four global-sized lenders, beginning next financial year. Union Bank said implementation of all the processes under amalgamation will happen without much disruption to customers and employees of Andhra Bank and Corporation Bank. "There will be revenue generation due to cost cutting on account of branch rationalisation and also on the technology side. We are looking at more than Rs 2,500 crore of synergy benefits in the next three years," Union Bank of India's Managing Director and CEO Rajkiran Rai G told in a telephonic interview.The combined entity will have 9,500 branches and 12,000 ATMs across the country."Of the 9,500 branches, we have identified 700 plus branches that will be rationalised because of the proximity, but it will not happen immediately. Maybe around 300 branches will be rationalised in the first year," Rai said. The capital adequacy ratio of the combined entity will be at 12.5-13 per cent, while gross NPAs and net NPAs stand at 14 per cent and below 6 per cent, respectively. The amalgamation will create an employee base of 75,000, of which 37,000 are from Andhra Bank and Corporation Bank put together. Rai said the technology integration is likely to take one year. "By September, Corporation Bank will get integrated and Andhra Bank by December. After that it will take three more months for on boarding of net banking and mobile banking," he said, adding that there is some slowdown in few processes owing to the lockdown but the bank is working around to deal with those issues.He said harmonisation of human resources has been completed and the board has approved all the products, processes and policies for the amalgamated entity."I want to give comfort that there will be minimum disruption or zero disruption for customers and staff," he said. The interoperability for basic banking services like fund transfers, cash deposits for the customers of Andhra Bank and Corporation Bank has already been put in place.Rai further said there was a plan to introduce new loan products for customers of the amalgamated entity but it has been postponed to avoid hassles for customers and staff who are already facing challenges due to the 21-day lockdown amid the coronavirus outbreak. "Due to the situation which has evolved over the past one month, some of the things, particularly on the advances side, have been postponed a bit. So we have told them (Andhra Bank and Corporation Bank) that they can continue with their old products for now," he said. MSME and retail borrowers of Andhra Bank and Corporation Bank will, however, will be able to avail loans under the emergency credit facility set up by Union Bank to provide additional liquidity to customers affected by COVID-19.Also, the benefit of reduction in repo rate by the Reserve Bank of India will be passed on to all the customers of the amalgamated entity, he said. On the deposit side, customers of the three banks will be offered the same products from the start, he said.He said some of the departments of the combined entity may be relocated to utilise the headquarters of Andhra Bank and Corporation Bank at Hyderabad and Mangalore, respectively."We are seriously thinking of relocating some of the departments like digital banking, audit and inspections and some of the departments from the operations side to use the headquarters of the two banks," Rai said.A few residential and commercial properties of Andhra Bank and Corporation Bank have been identified and they will also be disposed of gradually, he added. HV ANUANU

Union Bank expects Rs 2,500 cr benefits due to amalgamation : CEO Rajkiran Rai G

New Delhi, Jun 30 () The government on Tuesday approved a two-year extension to Union Bank of India managing director Rajkiran Rai G. With the extension of the term, he will continue as the MD of the bank till the superannuation - that is May 31, 2022 or until further order, according to a finance ministry notification. As per the Banking Regulation Act, the upper age limit for the managing director of nationalised banks is 60 year. Rai was appointed MD of Union Bank of India on July 1, 2017 for a period of three-years till June 30, 2020. Prior to his elevation as MD, he was executive director of Oriental Bank of Commerce. The extension of tenure comes at the backdrop of merger of Andhra Bank and Corporation Bank with Union Bank of India effective April 1 this year. With the merger, Union Bank India has become the country's fifth largest public sector lender. DP BAL BAL

Govt gives two-year extension to Union Bank of India MD

Kolkata, May 29 () The country's economy, which has been hit by the COVID-19 outbreak, needs support from the public sector banks (PSBs) to boost credit growth, an official said on Friday. The number of PSBs has come down after amalgamation of several lenders, and their ability to lend has increased manifold, Union Bank of India MD and CEO Rajkiran Rai G said. Recently, Oriental Bank of Commerce and United Bank of India were merged into Punjab National Bank, Syndicate Bank into Canara Bank, Allahabad Bank into Indian Bank and Andhra and Corporation banks into Union Bank of India. He said the lenders will be able to meet the expectations of the business community. Speaking at a webinar session organised by the BCCI, Rai said that there will be a shift of credit growth in favour of the PSBs, adding that depositors will expect an interest rate of 5.5 per cent. According to him, the issues of the depositors cannot be overlooked, and more stress will have to be given on the liability side to retain customers. Kotak Mahindra Bank whole-time director and president Gaurang Shah said the retail, a low-cost liability base, is key sustenance factor of the banks. Ajay Kanwal, MD and CEO of Jana Small Finance Bank said around 65 per cent of micro-finance borrowers felt the COVID-19 impact to a large extent. He said customers at the bottom of the pyramid are most vulnerable and the right kind of support should be extended to them. dc BDC BDC

Economy needs support from PSBs: Union Bank chief

Mumbai, Jun 11 () State-owned Union Bank of India, which merged Andhra Bank and Corporation Bank with it in April, on Thursday said it has created a new organisational structure having 18 zonal offices and 125 regional offices. Union Bank said it has established four new zonal offices in Chandigarh, Jaipur, Mangalore and Visakhapatnam to increase its penetration. Post the amalgamation, Union Bank has become the fifth largest public sector bank. It now has more than 9,500 branches and over 13,500 ATMs. "With the growth in our footprint following amalgamation, a strategic reorganisation is imperative to best leverage the opportunities ahead, and with this in mind we are strengthening our pan-India presence to ensure an enhanced focus on business growth and customer service," Union Bank MD and CEO Rajkiran Rai G said in a release. The bank has opened two new zonal offices in the southern part of the country aimed at further strengthening its market share. Additionally, 32 new regional offices are being opened in various locations including Shimla, Amritsar, Bareilly and Mau, among others. The bank has launched 'Regional Heads Booklet', which will be a one-stop manual to comprehensively cover all roles and responsibilities of regional heads. The booklet has been created with a view to minimize disruptions for customers or employees, the bank said. HV ANU ANU

Union Bank creates new organisational structure with 18 zonal offices

New Delhi, Jun 27 () Here are the latest updates on the coronavirus crisis in India and other parts of the world on Saturday. 11:26 a.m. The disruptions caused by the COVID-19 crisis also presents an opportunity for businesses to re-strategise and re-invent themselves, Union Bank of India MD and CEO Rajkiran Rai G said. 11:22 a.m. As many as 417 personnel of the Thane police commissionerate have tested coronavirus positive so far, officials say. 11:18 a.m. Transfers amid COVID-19 demoralised bureaucracy, BJP leader Pravin Darekar says. 11:03 a.m. India's top TT players raise funds to help fraternity members amid coronavirus crisis. 11:00 a.m. India's records highest single-day COVID-19 spike with over 18,000 cases as death toll rises to 15,685. 9:44 a.m. COVID-19 is triggering panic attacks, depression and suicides, say experts. 9:38 a.m. Buildings in congested areas and slums of north Mumbai will be sealed considering the rise in COVID-19 cases here in the last 15 days, Mumbai police commissioner Param Bir Singh says. 9:27 a.m. Odisha CM Naveen Patnaik calls upon all all to adhere to SC's order and COVID-19 guidelines to make the return journey of Lord Jagannath's Rath Yatra at Puri successful. 8:59 a.m. MP government asks police dept to recruit over 4,200 constables. VIS VIS

Coronavirus: Latest updates on COVID-19 crisis around the world

New Delhi, Apr 26 () Union Bank of India, which received 30 per cent stake in insurance joint venture IndiaFirst Life Insurance by virtue of the mega bank consolidation exercise of the government, plans to pare its holding to less than 10 per cent, a senior official said. Union Bank received the stake after Andhra Bank was merged with the Mumbai-based lender, effective April 1. As per guidelines of the Insurance Regulatory and Development Authority of India (IRDAI), one promoter cannot hold more than 10 per cent stake in two insurance ventures. Union Bank also holds 25.10 per cent equity stake in Star Union Dai-ichi Life Insurance, with the other partners being Bank of India and Dai-ichi Life Holdings of Japan. "We will continue the process started by erstwhile Andhra Bank to divest the stake to bring it below 10 per cent," Union Bank of India Managing Director and Chief Executive Officer Rajkiran Rai G told . Last year, Andhra Bank had initiated the process for selling its part or full stake in the insurance venture with Bank of Baroda (44 per cent stake) and Carmel Point Investments, owned by Warburg Pincus, holding the remaining 26 per cent. Both the insurance ventures are doing well and the valuation is going to improve further, he said, adding the stake sale will happen at opportune time and at good valuation. As per the government's mega consolidation plan, 10 state-owned banks were merged into four to create global size lenders, beginning April 1. Besides Andhra Bank, Corporation Bank was also merged with Union Bank. United Bank of India and Oriental Bank of Commerce were merged with Punjab National Bank; Syndicate Bank was merged with Canara Bank; and Allahabad Bank was amalgamated with Indian Bank. The merger of Oriental Bank of Commerce with PNB resulted in transfer of 23 per cent stake in Canara HSBC OBC Life Insurance to the latter. This too created a similar situation as that of Union Bank of India, as PNB is a promoter of PNB Metlife Insurance with the highest stake of 30 per cent. DP ABMABM

Union Bank plans to lower stake in IndiaFirst Life to less than 10 pc

(Eds: Adding details) Mumbai, Feb 10 () Union Bank of India on Monday reported a net profit of Rs 575 crore for the quarter ended December, helped by better recoveries and higher interest income. The state-run bank had reported a profit of Rs 153 crore in the year-ago period. "In this particular quarter (Q3) we were helped by good recoveries of Rs 2,000 crore from Essar Steel, Ruchi Soya and Prayagraj Power Generation. There was also a very steady improvement in the operating efficiency," the bank's managing director and CEO Rajkiran Rai G told reporters here. Total cash recovery and upgradation stood at Rs 2,837 crore during the quarter, while net interest income grew 25.7 per cent to Rs 3,134 crore from Rs 2,439 crore in the year-ago period. Domestic net interest margin (NIM) improved to 2.55 per cent from 2.23 per cent. The gross non-performing assets (NPAs) declined to 14.86 per cent as compared with 15.66 per cent a year ago, while net NPAs stood at 6.99 per cent as against 8.27 per cent. The bank's provision coverage ratio (PCR) stood at 67.42 per cent during the quarter under review as against 56.84 per cent a year ago. Fresh slippages during the quarter increased to Rs 5,112 crore, of which Rs 2,300 crore was on account of one large housing finance company that slipped into NPA. Rai said the bank expects recoveries of Rs 3,000 crore from various stressed accounts in the fourth quarter. "Actually, our total recoveries for the nine months have been Rs 4,910 crore (recoveries and upgradations). We are expecting another Rs 3,000 crore of recoveries in this quarter (Q4) both from NCLT and non-NCLT accounts. So, we can close the year at about Rs 8,000 crore," he said. The lender is expecting a recovery of Rs 700-800 crore from a large steel account which is very close to resolution, he said. The bank's special mention accounts 2 (SMA2) book stood at Rs 10,379 crore. It has signed intercreditor agreement in 24 accounts so far. The lender's gross advances grew 5.8 per cent to Rs 3,36,034 crore, driven by retail segment which increased by 10 per cent during the quarter. Rai said the process of merger of Andhra Bank and Corporation Bank with the bank is on track. Shares of Union Bank of India on Monday closed 4.19 per cent higher at Rs 50.95 apiece on the BSE. KPM HV RVK

Union Bank of India Q3 net profit zooms to Rs 575 cr on higher recoveries, interest income

New Delhi, Mar 29 () Following are the top business stories at 1700 hours:DEL14 BIZ-IOC-LD FUELNo fuel crisis in India; enough stock of petrol, diesel, LPG available to last lockdown: IOCNew Delhi: India, the world's third largest energy consumer, has enough petrol, diesel and cooking gas (LPG) in stocks to last way beyond the three-week nationwide lockdown as all plants and supply locations are fully operational, Indian Oil Corp (IOC) Chairman Sanjiv Singh said.DCM1 BIZ-FPI-OUTFLOWCoronavirus scare: FPIs pull out over Rs 1 lakh cr in MarNew Delhi: As the coronavirus pandemic is triggering fears of a global recession, foreign investors have started rowing back from the Indian capital markets by withdrawing a massive over Rs 1 lakh crore in March after remaining net buyers for six consecutive months.DCM10 BIZ-UNION BANKUnion Bank expects Rs 2,500 cr benefits due to amalgamation : CEO Rajkiran Rai GMumbai: State-owned Union Bank of India, which is amalgamating Andhra Bank and Corporation Bank with it, hopes to reap cost benefits of over Rs 2,500 crore through rationalisation of branches and savings on technology on the combined entity. DCM13 BIZ-GOVT-CSR FUNDSContributions to PM relief fund will help cos meet CSR obligations, says govt officialNew Delhi: Corporates have spent Rs 52,000 crore towards social welfare activities in the last five financial years and now making contributions to the Prime Minister's relief fund will further help them meet their obligations under the companies law, according to a senior government official.DCM21 BIZ-PRADHAN-SAUDIPradhan speaks to Saudi Oil Min for uninterrupted crude, LPG suppliesNew Delhi: Oil Minister Dharmendra Pradhan on Sunday discussed global oil market developments and sourcing LPG with Saudi Energy Minister Prince Abdulaziz bin Salman to ensure uninterrupted fuel supplies in the world's third largest energy consumer.DCM27 BIZ-POWER DEMANDPeak power demand falls 28 pc to 117 GW in since March 20New Delhi: Peak power demand in the country dipped over 28 per cent to 117.76 gigawatts (GW) on Saturday as compared to 163.72 GW on March 20, showing the impact of nationwide lockdown amid COVID-19 outbreak.DCM9 BIZ-MARKET-OUTLOOKMarkets to focus on global cues, fresh news flow on Covid-19: AnalystsNew Delhi: Stock markets will focus on global cues and fresh news flow on Covid-19 pandemic for further cues in a holiday-shortened week ahead, according to analysts.DCM3 BIZ-STOCKS-MCAPSeven of top-10 most valued cos add Rs 1.23 lakh cr in m-cap; Infy, RIL leadNew Delhi: Seven of the top 10 most-valued Indian companies together added Rs 1,23,039.72 crore in market valuation last week, led by Infosys and Reliance Industries Limited (RIL).   RVK

Business highlights

New Delhi, Mar 31 () Banks have started sensitising their branches about three months' moratorium on all term loans, including home, auto and crop loans, to help customers in overcoming financial difficulties due to the coronavirus outbreak and subsequent nation-wide lockdown.Several banks on Tuesday said they have informed and provided their branches with the detailed guidelines on various schemes announced by the RBI recently and customers are being sent messages individually on their registered mobile number about the EMI payment.Union Bank of India Managing Director Rajkiran Rai G told that branches have been informed about with respect to moratorium on all term loans."In case of those who have opted for ECS route for EMI deduction, customers are given the option of availing the facility by informing the branch concerned through mail or other digital medium," he said.Banks on its own unilaterally cannot stop ECS payment due to legal issue but the customer has the option of requesting bank to stop it, Rai said.He further said the customers whose income has not been impacted are encouraged to continue payment as per the scheduled."As per COVID 19 regulatory package of RBI, Indian Bank allows a moratorium by deferring payment of EMI/ Term Loan Instalments &amp; Interest/ Interest on Working Capital for 3 months w.e.f 1st March 2020," a tweet issued by the banks said.Another public sector lender PNB said it presents relief scheme for its customers. "In view of COVID-19, it has been decided to defer payment of all installments on term loan and recovery of interest on cash credit facilities falling due between March 01,2020 and May 31 2020."Canara Bank tweeted, "In terms of Covid 19 - RBI package, borrowers are eligible for moratorium/ deferment of installments/EMI for Term loans falling due from 01.03.2020 to 31.05.2020 &amp; repayment period gets extended accordingly. SMS also has been sent to customers to avail the same." With banks clarifying their positions on EMI moratorium, it will help clear doubts of customers who were confused after getting payment reminders from lenders.Last Friday, the RBI had announced that all term loans, including retail and crop loans and working capital payments, will be covered by the three-month moratorium. Banks will now have discretion in deciding the limits on working capital, with RBI saying that no payment miss should be considered a default and reported to credit information companies."The repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period," the RBI said.Deferred instalments under the moratorium will include principal and/or interest components, bullet repayments, EMIs, credit card dues, it said."Lending institutions shall frame board-approved policies for providing the above mentioned reliefs to all eligible borrowers. Wherever the exposure of a lending institution to a borrower is Rs 5 crore or above as on March 1, 2020, the bank shall develop an MIS on the reliefs provided to its borrowers which shall inter alia include borrower-wise and credit-facility wise information regarding the nature and amount of relief granted," it said.Following the announcement, the banks just had one working day to finalise the details and issue instructions to branches, a senior official of another public sector bank said.As soon as finer points on implementation of moratorium came from the Reserve Bank, the official said, board approval was sought as per the direction of the central bank and necessary instructions have been issued to staff regarding their implementation.Yesterday, the Agriculture Ministry said that farmers will continue to get short-term loan of up to Rs 3 lakh at a subsidised interest rate of 7 per cent, and prompt repayers will get it at four per cent as the government extended the subsidy to banks till May 31.The decision, which are implemented through banks, comes as many farmers are not being able to go to banks for payment of their loan dues on account of restrictions imposed due to the lockdown.Besides, FAQ are expected to be issued by Indian Banks Association on the various measures announced by the Reserve Bank to the benefit of customers. DP MKJ

Covid-19: Banks sensitise branches on EMI moratorium, other RBI relief measures

New Delhi, Apr 1 () The biggest-ever consolidation exercise in the public sector banking space effected on Wednesday will mark a new dawn for the Indian banking sector, the Finance Ministry said on Wednesday. Six public sector banks (PSBs) namely Oriental Bank of Commerce, United Bank of India, Syndicate Bank, Andhra Bank, Corporation Bank and Allahabad Bank lost their individual identity as they were merged into four bigger lenders with the objective to make them globally competitive. "PSBs' amalgamation today will mark a new dawn for #IndianBanking. Bigger &amp; stronger PSBs to to offer faster loan processing, banking @ home, need-driven credit &amp; specialized products for customers," the Department of Financial Services, which comes under the Ministry of Finance, said in a tweet. The exercise assumed significance as it took place at a time when the entire country is under the grip of the COVID-19 outbreak, which has triggered a 21-day nation-wide lockdown. Earlier in the day, Punjab National Bank said all nation-wide branches of United Bank of India and Oriental Bank of Commerce has started functioning as PNB branches. The merger has created the second largest nationalised bank of the country - both in terms of business and branch network after the State Bank of India (SBI). The amalgamated bank will have a wider geographical reach through 11,000 plus branches, more than 13,000 ATMs, one lakh employees and a business mix of over Rs 18 lakh crore. "The bigger geographical footprint will help us serve our customers more effectively and efficiently," said PNB managing director S S Mallikarjuna Rao said. Experts were of the opinion that merger at this point of time will not be very smooth and seamless. However, heads of the anchor banks exuded confidence. "We don't foresee any problem it is going as per the plan. We have reviewed in the light of this situation also. Certain modification in implementation we have done so that there is no disruption for employees and customers. We are ensuring zero disruption," Union Bank of India Managing Director Rajkiran Rai G told . The four anchor banks -- PNB, Canara Bank, Union Bank and Indian Bank -- are postponing some part of the implementation and processes due to the lockdown. "For merging banks, we have not changed some of the process like loan process etc, which we proposed to do earlier. However, because of the prevailing situation, we will be continuing old system till the situation comes under control," he said. With the merger, the bank looking at more than Rs 2,500 crore of synergy benefits in the next three years, he added. As per the mega consolidation plan announced in August last year, Oriental Bank of Commerce and United Bank of India is merged into Punjab National Bank (PNB); Syndicate Bank into Canara Bank; Andhra Bank and Corporation Bank into Union Bank of India; and Allahabad Bank into Indian Bank. Following the consolidation, there will be now seven large public sector banks (PSBs), and five smaller ones. There were as many as 27 PSBs in 2017. The total number of public sector banks in the country has come down to 12. The merger has resulted in the creation of seven large PSBs with scale and national reach, with each amalgamated entity having business of over Rs 8 lakh crore. These banks now have scale comparable to global banks and capable of competing effectively in India and globally. In addition, the consolidation is expected to provide impetus to the merged entities by increasing their ability to support larger ticket-size lending and have competitive operations by virtue of greater financial capacity. Last year, Dena Bank and Vijaya Bank were merged with Bank of Baroda. Prior to this, the government had merged five associate banks of SBI and Bharatiya Mahila Bank with the public sector bank. These were State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore and State Bank of Hyderabad effective April 2017. DP MKJMKJ

Mega bank merger marks new dawn for Indian banking space: FinMin

(Eds: Adding more info) New Delhi, Mar 31 () The biggest ever consolidation exercise in the public sector banking space is slated to take shape on Wednesday when six PSU lender will be merged into four in a bid to make them globally competitive.The exercise assumes significance as it is taking place at a time when the entire country is under the grip of COVID-19 outbreak. It has triggered 21-day lockdown to contain the spread of the deadly virus.Experts said merger at this point of time will not be very smooth and seamless. However, heads of the anchor banks are exuding confidence."We don't foresee any problem it is going as per the plan. We have reviewed in the light of this situation also. Certain modification in implementation. We have done so that there is not any disruption for employees and customers. We are ensuring zero disruption," Union Bank of India Managing Director Rajkiran Rai G told .The four anchor banks -- PNB, Canara Bank, Union Bank and Indian Bank -- are postponing some part of the implementation and processes due to the lockdown."For merging banks, we have not changed some of the process like loan process etc, which we proposed to do earlier. However, because of the prevailing situation we will be continuing old system till the situation comes under control," he said.With the merger, the bank looking at more than Rs 2,500 crore of synergy benefits in the next three years, he added.As per the mega consolidation plan, Oriental Bank of Commerce and United Bank of India will merge into Punjab National Bank (PNB); Syndicate Bank into Canara Bank; Andhra Bank and Corporation Bank into Union Bank of India; and Allahabad Bank into Indian Bank.Following the consolidation, there will be seven large public sector banks (PSBs), and five smaller ones.There were as many as 27 PSBs in 2017. The total number of public sector banks in the country will come down from 18 to 12 beginning next financial year.Speaking on preparedness, Indian Bank MD Padmaja Chunduru said harmonisation of products -- both on the loan and deposit sides -- has been completed and the same products will be offered to all customers.She also 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."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.Following this merger, PNB will become second largest after the State Bank of India (SBI), Canara Bank fourth, Union Bank of India fifth and Indian Bank seventh biggest public sector lender.Commenting on the consolidation, Canara Bank MD L V Prabhakar said, "We are delighted that following the amalgamation as a single legal entity, we will become a powerful banking institution that is globally competitive and efficient working towards providing differentiated customer experience excellence across all our products and services".The combined entity will be large but with an unchanged approach to grass-root banking, customer delight, and satisfaction, Prabhakar said.The merger will result in the creation of seven large PSBs with scale and national reach, with each amalgamated entity having business of over Rs 8 lakh crore and it would help create banks with scale comparable to global banks and capable of competing effectively in India and globally.In addition, consolidation would also provide impetus to merged entities by increasing their ability to support larger ticket-size lending and have competitive operations by virtue of greater financial capacity.Last year, Dena Bank and Vijaya Bank were merged with Bank of Baroda. Prior to this, the government had merged five associate banks of SBI and Bharatiya Mahila Bank with the public sector bank.These were State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore and State Bank of Hyderabad effective April 2017. DP HV RS BAL

Mega-merger of PSU banks to be effective from Wednesday; 6 banks cease to exist

<ul><li>Total exposure of Indian banks in the alleged fraud is approximately Rs 20,000 crore</li><li><keyword id="6355975" type="COMPANY" weightage="20" keywordseo="axis-bank">Axis Bank</keyword> has an exposure of Rs 20-30 billion, <keyword id="6358005" type="COMPANY" weightage="20" keywordseo="allahabad-bank">Allahabad Bank</keyword> has Rs 40 billion and SBI, Rs 13 billion. </li><li>As a result of the scam, the Reserve Bank of India (RBI) decided to ban LoU-based transactions on March 13.</li></ul> <keyword id="62034" type="CITY" weightage="20" keywordseo="Punjab-National-Bank">Punjab National Bank</keyword> (PNB) has five days to honour its guarantees to the <keyword id="63524" type="CITY" weightage="20" keywordseo="Union-Bank-of-India">Union Bank of India</keyword> to the tune of Rs 10 billion. If it fails to do so, Union Bank, in an unprecedented move, will have no option but to consider PNB a defaulter in its books and may even have to classify the unpaid amount as a non-performing asset (NPA) based on the recommendations of its auditors. Both banks are state-owned and if this default happens, it could shake the foundation of the banking sector leading to both the people and international banking institutions losing faith in the banking system. The only way this can be avoided is if the government or the RBI swoop in and bail PNB out. All this stems from the <keyword id="571991" type="ORGANIZATION" weightage="20" keywordseo="Nirav-Modi">Nirav Modi</keyword> case which involves fraudulent letters of undertaking (<keyword id="368886" type="PERSON" weightage="20" keywordseo="Lou">LoU</keyword>). And though this matter is being investigated by government agencies, Union Bank contests that there is no fraud in its books. Rajkiran Rai, MD of Union Bank told the <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/pnb-may-become-1st-bank-to-be-labelled-as-defaulter/articleshow/63459075.cms">Economic Times</a>, “For us, it is a genuine claim on PNB backed by documents. It is not a fraud in our books... We will take the auditor’s view. However, we don’t want to list PNB as a defaulter. We are expecting some intervention from either the government or RBI so that there is a resolution by March 31.” LoUs are essentially a tool used between Indian banks as guarantees under which customers of one bank can raise money from the other Indian bank's foreign branch in the form of a short-term credit arrangement, typically 90 days long. In the case of Nirav Modi and Mehul Choksi scam, the total exposure of Indian banks in the alleged fraud is approximately Rs. 20, 000 crore--almost twice the initial estimate. According to <a href="http://www.business-standard.com/article/finance/in-5-days-pnb-may-be-first-bank-to-get-defaulter-tag-due-to-nirav-modi-118032600248_1.html" data-type="tilCustomLink">Business Standard</a>, apart for Union Bank of India, <a class="storyTags" href="http://www.business-standard.com/search?type=news&amp;q=axis+bank" target="_blank">Axis Bank </a>has an exposure of Rs 20-30 billion, <a class="storyTags" href="http://www.business-standard.com/search?type=news&amp;q=allahabad+bank" target="_blank">Allahabad Bank </a>has Rs 40 billion and SBI, Rs 13 billion. As a result of the scam, the Reserve Bank of India (RBI) decided to ban LoU-based transactions on March 13. However, this move has raised concerns with a bunch of bankers. Asked if the RBI decision is an overreach action by the <a href="https://economictimes.indiatimes.com/news/economy/policy/policymakers-need-to-be-careful-sanyal-on-lou-ban/articleshow/63302747.cms">Economic Times</a>, the Finance Ministry's Principal Economic Advisor Sanjeev Sanyal said, "I am not in a position to comment on RBI decision they have just introduced… But, the general point remains that you have to take a nuanced view of these things in particular because you are not dealing with a silo system. You are dealing with an inter-connected ecosystem and if you block off oxygen in one part it rapidly spreads to rest of the system.”

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