Integration of technology platforms will remain the key challenge for the merger of Punjab National Bank, Oriental Bank of Commerce and United Bank of India, senior executives at these banks said, even as the government has selected the merger partners on the basis of their IT compatibilities instead of geographic reach.
Harmonising human resource issues will be another key aspect of these mergers, as was seen in the past.
“Asymmetrical entities are coming together, so there is bound to be some challenges,” Ashok Kumar Pradhan, chief executive of UBI, said in Kolkata on Saturday at an interactive meeting involving the three banks and customers.
PNB, OBC and UBI use Infosys’ Financle software for their core banking solutions, while Allahabad Bank and Indian Bank are on TCS’ BaNCS software, prompting the government to stitch these alliances for a smoother transition.
Similarly, Canara Bank and Syndicate Bank are on the same iFlex platform. Union Bank of India, Andhra Bank and Corporation Bank are again on the Finance platform.
UBI and OBC use Finance-7 while PNB uses Financle-10. So, UBI and OBC need to upgrade their software solutions to have a seamless integration.
These banks have formed 23 committees covering every aspect of the merger, such as IT, HR, and product offerings, to ensure success of the exercise.
Chief executives of all the 10 public sector banks, which are selected as merger candidates, had a meeting at the Bank of Baroda headquarters in Mumbai on September 4 to get a lowdown on the merger experience.
“Bank of Baroda has given us a template on the merger and the likely challenges in this exercise. It was a great learning,” UBI’s Pradhan said.
PNB board has already approved the merger while the UBI and OBC will consider it at their respective board meetings – both scheduled for September 18.
The merger is expected to take shape from April 1, 2020. The merged entity will become the convenor of state level bankers’ committee in the states of Haryana, Punjab, Tripura and West Bengal, and union territories of Delhi and Chandigarh.
