Discussing Punjab National Bank's merger with Oriental Bank of Commerce and United Bank, PNB MD and CEO Sunil Mehta assured that "there will not be any retrenchment of any employee."
"The boards will deliberate on different synergies, which will help in the reduction of costs like bulk purchase," Mehta said in an interview with CNBC-TV18.
The government last week announced the merger of 10 state-owned banks into four. One of them is the merger between PNB, OBC and United Bank.
Discussing the merger further, Mehta said after the merger and the capital infusion into the bank of Rs 16,000 crore and Rs 1,600 crore for United Bank, the capital ratio would be in the range of 13.7 percent.
For the combined entity, the net nonperforming assets (NPA) would be below 6 percent before March 31, he said.
With regards to credit growth, the ballpark would be around 12 percent for the combined entity. As of March 2019, the credit growth for PNB was 14 percent YoY and that for June quarter of 2019 was around 8 percent, he said.
Mehta said although the timeline for the merger would be difficult to give, the entire system is geared up to achieve it at the fastest level so that "we can provide the much-needed growth to the economy and provide support to the entire system".
With regards to branches, he said if there are two branches on the same road, both of them can perform different functions — one can look at MSME lending and the other at industrial finance lending. "However, we have to yet create a detailed plan but hope is that the three banks will have the wisdom to optimise on their resources by creating new verticals and expanding their business than contracting it," said Mehta.
Source: CNBC-TV18
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