30 committees monitoring the Canara-Syndicate Bank merger process

Canara Bank
Around 30 committees are currently looking into various aspects of integration, including human resource (HR) and technology, as part of the merger process between Canara Bank and Syndicate Bank. As part of this process, these banks have also appointed legal and financial consultants to conduct due diligence on valuation and swap ratio.

“The committees formed by both banks are looking into different areas. At the same time, various processes relating to HR and customer services are being studied, so that these can be harmonised,” said Mrutyunjay Mahapatra, managing director and chief executive officer at Syndicate Bank. 

He added, “We are also completing the promotion process for the next year before the due date of the merger.”

Officials of both banks said as part of the HR integration process, the committee is looking into the service conditions, rules related to promotion, career progression, leave and transfer policies to ensure proper alignment before the merger. 

“While the human resource management system (HRMS) is part of technology integration, common ground on other aspects of HR norms will be arrived at after discussion,” said Mahapatra. 

After the merger, the combined entity will also see a higher number of chief general managers (CGMs). Under the current guidelines, any bank having Rs 10 trillion of business can appoint one CGM for every four general managers (GMs).

Canara Bank meets this criterion and has 15 CGMs who are manning its various operations. Since Syndicate Bank has around 26 GMs, there will be six CGM posts after the merger.

“The merged entity will have a larger number of CGMs, which could be around 20-21,” said Mahapatra.  

As part of the consolidation of public sector banks, the central government in this August had announced mergers among these lenders. This will bring down the number of PSBs to 12 from earlier 27. 

While United Bank of India and Oriental Bank of Commerce will be merged with Punjab National Bank, making the proposed entity the second largest PSB, Syndicate Bank will be merged with Canara Bank as part of this exercise. 

Similarly, Allahabad Bank will be amalgamated with Indian Bank, while Andhra Bank and Corporation Bank will be merged with Union Bank of India.

Though technology platforms played a major role in deciding the merger plans, bank officials said that the complexity of the process could be higher despite the merged entities using the same core banking platforms.

For instance, though both Canara and Syndicate Bank use Oracle’s i-Flex (which is now known as OFSS), but the version of the software are different. While Syndicate Bank is currently using the latest version (11.6), Canara Bank is using 10.2 version.

ON THE AGENDA

  • Legal & financial consultants on job to determine valuation, swap ratio
  • Merged entity is likely to have 21 chief general managers 
  • Tech integration may take more time despite both lenders using same CBS



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