Senior Congress leader Jairam Ramesh on Wednesday lamented that two pioneers in Indian banking-- Andhra Bank & Syndicate Bank "lost their distinctive identity." The Rajya Sabha MP also added that he is not a supporter of bank mergers at all and had opposed it in Parliament. His statement came after the government on Wednesday brought into effect merger of six banks with other banks.
Today two pioneers in Indian banking-- Andhra Bank & Syndicate Bank-- lose their distinctive identity. Andhra was started by stalwart Congressman B. Pattabhi Sitaramayya and Syndicate by the great TMA Pai. I am not a supporter of bank mergers at all and opposed it in Parliament.— Jairam Ramesh (@Jairam_Ramesh) April 1, 2020
Jairam Ramesh also said that six banks have lost their identity due to bank mergers which are based on the "faulty" assumption of "bigger the better". "These bank mergers are based on a faulty assumption that bigger the better. This has never worked. There are other issues related to working culture, traditions, human resources that are forgotten in this misguide craze for bigger balance sheets," Ramesh told PTI.
While Oriental Bank of Commerce and United Bank of India have merged into Punjab National Bank; Syndicate Bank has merged with Canara Bank; Allahabad Bank has been merged with Indian Bank and Andhra Bank and Corporation Bank have been merged in Union Bank of India.
The banks' merger was announced last year in August and the Union Cabinet gave the final approval on March 4. In the past, various other bank mergers have taken place. For instance, in 2017, the country's largest public lender - the State Bank of India took over five of its associates and Bharatiya Mahila Bank.
Last year, Vijaya Bank and Dena Bank were merged with Bank of Baroda. Kotak Mahindra Bank and ING Vysya Bank merger and amalgamation of Centurion Bank of Punjab Ltd. with HDFC Bank took place in 2014 and 2008, respectively.
(With agency inputs)