PNB disagrees with the proposal
With Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank of India (UBI) set to merge, OBC and UBI have requested the Finance Ministry to consider a new name for the merged entity.
If the Ministry agrees to the request, then this will a departure from the precedent set by the merger of Bank of Baroda (BoB), Vijaya Bank and Dena Bank that took effect this financial year. In that merger, BoB, which was the transferee bank, retained the name. Vijaya Bank and Dena Bank were transferor banks.
In the case of PNB, OBC and UBI merger, PNB will be transferee bank. The other two banks are of the view that the name of the merged entity should reflect a pan-India presence and not have a localised name.
Hence, OBC and UBI have requested the Ministry to consider a new name.
However, the idea of a new name does not seem to have gone down well with PNB — the largest bank in the merger. The lender took to social media a few days ago to clarify there was no proposal to change the name of the bank.
In fact, during the BoB-Dena-Vijaya merger, Dena and Vijaya also proposed a name change. However, many regulatory clearances are required for a name change, including from the Securities and Exchange Board of India.
Since the process would have been time-consuming, the Ministry refrained from approving a name change.
However, it is not unusual for Indian banks to change their name due to a merger, or otherwise. Most recently, after IDFC Bank and Capital First, an NBFC, merged, the name of the merged entity was IDFC First Bank.
Also, erstwhile Ratnakar Bank was renamed as RBL Bank and Catholic Syrian Bank is now known as CSB Bank.
The government expects all the mergers of public sector banks, which were announced in 2019, to become effective from April 1.
Apart from PNB, UBI and OBC, the government had also announced three other sets of mergers — Union Bank of India, Corporation Bank and Andhra Bank; Allahabad Bank and Indian Bank; and, Canara Bank and Syndicate Bank.
The government is yet to announce the scheme of amalgamation for these mergers for which Cabinet approval is required. Once the scheme of amalgamation is announced, there will be clarity on the name of the new entities.
In the case of the BoB, Vijaya and Dena merger, the scheme of amalgamation was announced in early January last year and the merger came into effect from 1 April, 2019.
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