With the government deciding to merge ten public sector banks into four as part of its plan to create larger and globally competitive banks, retail customers will have to take note of some changes.
Punjab National Bank, Union Bank of India, Canara Bank and Indian Bank are the anchor banks and customers of these banks will not be affected.
Merging banks are Oriental Bank of Commerce, United Bank of India, Syndicate Bank, Andhra Bank, Corporation Bank and Allahabad Bank. If you have an account in any of these banks, then you will have to track the following changes going ahead.Account number & Customer ID
Your account number and customer IDs will change after the merger. In case you have accounts with more than one merging bank, you will be given a single ID. The average monthly balance requirement, service charges and fees will also change after the merger, as decided by the new bank. Keep your contact information updated so that the bank can notify you about any changes in its terms and conditions.Branch banking and lockers
As of now, there will be no immediate changes as it requires backend integration. Going ahead, branches overlapping in the same vicinity may be shut or relocated if the banks decide to do so. Finance Minister Nirmala Sitharaman has assured that the merger will not disrupt day-to-day workings of the bank. Interoperability among merging banks will allow you to make cash deposits, withdrawals, transaction and balance inquiries. You can walk into the branches of any merging bank to carry out these transactions.Cheque books
Your existing cheque books continue to be valid. In case of any change, the bank will notify you well in advance. New cheque books will be issued by the merged bank.ATM cards
Existing debit and credit cards will continue to be valid, until notified by the bank. On the bright side, customers will be able to access ATMs of all the merging banks for free. Cash withdrawals, balance inquiry, mini statements and pin change can be carried out at ATMs of all the merging banks. New cards will be issued by the merged bank.Loans and deposits
Interest rates on your existing loans and fixed deposits will not change post the merger, unless renewed. It will only be transferred to the merged bank. You can continue to pay EMIs on your existing loans and earn interest on your existing fixed deposits. However, on renewal you will have to go with the interest rates offered by the merged bank. Since all retail loans will be linked to external benchmark from October 1, the new bank will give you an option to shift to the new interest rate regime. If you continue to stay with MCLR, the loan will be linked to the new bank's rates upon reset.Insurance policies
As per regulatory norms, a bank cannot have more than three tie-ups in life, health and general insurance each. Hence, tie-ups with the insurers of erstwhile banks will be discontinued. You may have to migrate to the insurance partner of the merged bank. Keep a lookout on the policies offered by the insurance partners of the anchor banks.
When Bank of Baroda merged on April 1, 2019, it said it will provide support and services for insurance partners of merged banks-Dena Bank and Vijaya Bank-till six months from the date of the merger. For health insurance renewals, the bank has allowed to retain continuity benefits if customers migrate to the new bank's partners.Mobile and online banking
Banks may keep their respective mobile applications up and running for few months post the merger, until the IT platforms are fully integrated. The websites of the merging banks will divert product and interest rate queries to the online portal of the merged bank.IFSC code
You can use the existing IFSC code for online transfers until the merger. Post consolidation, the merging banks will be assigned a common IFSC code by RBI. Your bank will notify you in case of any changes.