Page 30 - Banking Finance January 2022

ARTICLE

Y A great number of posts of CMD, ED, GM and Zonal Y In the Trade Unions, dominance of one section, one
Managers will be abolished, resulting in savings of Crores linguistic group and one geographical region will come
of Rupee. down.
Y Many controlling offices have to be closed, resulting in Y Customers will have access to fewer banks offering
savings. them wider range of products at a lower cost.
Y In many banks, the GOI's nominee and RBI's Y Customer service will improve vastly due to advanced
representative on the bank boards will lose their jobs. technology, improved systems and better ambience of
This will not only save considerably huge money, but bank branches.
reduce their unnecessary interference in day to day Y From regulatory perspective, monitoring and control of
affairs of the banks. less number of banks will be easier after mergers. This
Y New People and New thinking will get infused in the is at the macro level.
new entity. Better systems also may be introduced, to Y Larger banks will have more stability and strength,
make the work life of the employees more comfortable making the job of the regulator easier.
and enjoyable. Y It helps to improve the professional standard.
Y After mergers, bargaining strength of bank staff will
become more and visible. Bank staff may look forward Drawbacks of amalgamation for the
to better wages and service conditions in future.
Organization
Y The wide disparities between the staff of various banks
Y Mergers may result in shifting/closure of many ATMs,
in their service conditions and monetary benefits will
Branches and controlling offices, as it is not prudent and
narrow down.
economical to keep so many banks concentrated in
Y As the network of branches, after mergers, will be several pockets, notably in urban and metropolitan
evenly distributed across the country, the threat of centre's. Though the closure or merger of a large
transfers to far off places will diminish for officers up to number of branches will not happen all of a sudden, it
MMGS III. is bound to happen over a period.

Y Banks can spend more money and other resources, for Y Banks may be compelled to offer another round of VRS,
the training and development of their employees and especially to those above 50 years of age and to those
officers. having more than 25 years of experience in the same
Y Employees will get wider exposure in the changed bank. Banks might lose thousands of talented and
environment and new opportunities will open up for experienced personnel at a time, resulting in serious
them. crisis at the middle and senior management levels.
Y Trade Unions will have more numerical strength in the Y Mergers may result in job losses on account of large
new organization. number of people taking VRS on one side and slow
down or stoppage of further recruitment on the other.
This may worsen the unemployment situation further.
The plight of people taking pre-mature retirement
(through VRS route or otherwise) will turn more pitiable
than being envisaged.

Y The banks accounts linked to ECS and demat records
are to be changed, in future. This is a laborious, time
taking and expensive exercise.
Y Different banks have different goals, priorities and
business strategies. Synchronization may be very
difficult.
Y The weaknesses of the small banks may get transferred

30 | 2022 | JANUARY | BANKING FINANCE