The merger process of banks will create a number of challenges

Mumbai, Ta. 31 August 2019, Saturday

Concerns have been raised by concerned bank managers that the mega-merger process in the country's banking sector will also raise a number of challenges. The HR policy of the banks, from the functioning of the branches to the incorporation of the subsidiary banks, will create many hurdles in the merger process, said a banking sector analyst.

For example, the Punjab National Bank (PNB) has five subsidiaries. In addition, as the technology level of each of the banks varies, it will be a question of what kind of technology to adopt in the new bank that will arise after the merger.

In some cases, the government has decided to set up a new bank and in some it has decided to merge one bank into another. There is a welcome step towards consolidation in the banks, but postponing it will go a long way, analysts said.

Banks' branches are also likely to become a tricky issue. The banks which have decided to consolidate have a large number of branches in the city and rural areas. The process of organizing the workforce will not be easy, especially at the level of the office staff. There is scope for controversy over the distribution of responsibility of the bank administrators, he said.

Meanwhile, the bank employees' organizations have opposed this mega merger and the decision to keep four of the four public sector banks is irrational.