Merger of 10 PSU banks into 4 effective from today; 6 banks cease to exist

The biggest ever consolidation exercise in the public sector banking space is slated to take shape on Wednesday when six PSU lender will be merged into four in a bid to make them globally competitive.
The exercise assumes significance as it is taking place at a time when the entire country is under the grip of COVID-19 outbreak. It has triggered 21-day lockdown to contain the spread of the deadly virus.

Experts said merger at this point of time will not be very smooth and seamless. However, heads of the anchor banks are exuding confidence. "We don't foresee any problem it is going as per the plan. We have reviewed in the light of this situation also. Certain modification in implementation. We have done so that there is not any disruption for employees and customers. We are ensuring zero disruption," Union Bank of India Managing Director Rajkiran Rai G told PTI.
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The four anchor banks -- PNB, Canara Bank, Union Bank and Indian Bank -- are postponing some part of the implementation and processes due to the lockdown. "For merging banks, we have not changed some of the process like loan process etc, which we proposed to do earlier. However, because of the prevailing situation we will be continuing old system till the situation comes under control," he said.
With the merger, the bank looking at more than Rs 2,500 crore of synergy benefits in the next three years, he added. As per the mega consolidation plan, Oriental Bank of Commerce and United Bank of India will merge into Punjab National Bank (PNB); Syndicate Bank into Canara Bank; Andhra Bank and Corporation Bank into Union Bank of India; and Allahabad Bank into Indian Bank.
Following the consolidation, there will be seven large public sector banks (PSBs), and five smaller ones. There were as many as 27 PSBs in 2017. The total number of public sector banks in the country will come down from 18 to 12 beginning next financial year.
Speaking on preparedness, Indian Bank MD Padmaja Chunduru said harmonisation of products -- both on the loan and deposit sides -- has been completed and the same products will be offered to all customers.
She also said all the deposit and loan products, including access to Indian Bank's emergency credit lines launched in the wake of Covid-19 would be made available to the customers of Allahabad Bank.
"We have focused all our resources on the important things that matter for day one -- treasury integration has happened and IT integration to the extent of product harmonization and rolling out of the same products has happened," she said.
She expects the entire IT integration to be completed by December 2020. Following this merger, PNB will become second largest after the State Bank of India (SBI), Canara Bank fourth, Union Bank of India fifth and Indian Bank seventh biggest public sector lender.
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Commenting on the consolidation, Canara Bank MD L V Prabhakar said, "We are delighted that following the amalgamation as a single legal entity, we will become a powerful banking institution that is globally competitive and efficient working towards providing differentiated customer experience excellence across all our products and services". The combined entity will be large but with an unchanged approach to grass-root banking, customer delight, and satisfaction, Prabhakar said.
The merger will result in the creation of seven large PSBs with scale and national reach, with each amalgamated entity having business of over Rs 8 lakh crore and it would help create banks with scale comparable to global banks and capable of competing effectively in India and globally.
In addition, consolidation would also provide impetus to merged entities by increasing their ability to support larger ticket-size lending and have competitive operations by virtue of greater financial capacity.
Last year, Dena Bank and Vijaya Bank were merged with Bank of Baroda. Prior to this, the government had merged five associate banks of SBI and Bharatiya Mahila Bank with the public sector bank. These were State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore and State Bank of Hyderabad effective April 2017.

Operationalise additional blocks soon or return them: Govt to Coal India

The coal ministry has asked state-owned CIL to either expedite the operationalisation of 110 additional blocks allotted to it or return the mines to the government, an official said.
The coal ministry recently enquired from the PSU about the operational status of the additional blocks allotted to it, and whether extraction from these coal blocks is techno-economically feasible, the official added.

The government was told that of the 110 additional CIL blocks, 50 were explored, 41 were under exploration and balance 19 were partly/regionally explored.
Further, out of 50 explored blocks, project reports of 25 blocks have been prepared, the coal ministry was informed.
The ministry "emphasised on quick operationalisation of all of these blocks, otherwise CIL may return them to the Ministry of Coal for their allotment/ auction to other agencies," the official said.
Coal India Ltd (CIL) accounts for over 80 per cent of domestic coal output.
The state-owned firm had earlier said that it will produce 750 million tonnes of coal in the next financial year.
The PSU will further produce 1 billion tonnes of coal by FY2024, Coal Minister Pralhad Joshi had said.
CIL is targeting to produce 660 million tonnes of the dry fuel in 2019-20 compared to 607 million tonnes in the last fiscal.

PSUs start aggressive campaigns to publicise Modi govt's flagship schemes

Public sector undertakings (PSUs) in the oil and power sectors have started aggressive campaigns to publicise government’s flagship schemes.
For instance, Indian Oil Corporation (IOC) has issued a Rs 2.93 billion tender for outdoor publicity for Pradhan Mantri Ujjwala Yojana (PMUY).

The publicity campaign for PMUY involves putting up hoardings in Karnataka, Gujarat, Odisha, Mumbai and Delhi. “Since the target group of this scheme is predominantly rural women, oil marketing companies (OMCs) feel massive publicity is required to make rural women aware of it, as also the social and economic benefits of using LPG,” a spokesperson of the ministry of petroleum and natural gas said in an e-mailed response.
IOC, the country's largest petroleum retailer, will, however, be setting up hoardings across 26 airports in the country, not visited by this target group.
Under PMUY, the government provides free cooking gas connections to Below Poverty Line (BPL) families. The scheme is set to achieve its target of 50 million connections seven months in advance, by mid-August.
At the same time, the government is also considering to come out with massive advertisements on its four-year achievements, close to Independence Day. The government has so far given 48.9 million connections under PMUY, covering 715 districts.
National transmission company Power Grid Corporation of India (PGCIL) and hydropower major NHPC, are also carrying out media outreach campaigns. The two power PSUs have been entrusted with publicity for another flagship scheme, Sahaj Har Ghar Bijli Yojana (Saubhagya). The scheme aims at providing metered connections to all households and free connections to BPL households. The scheme covers both rural and urban homes.
According to information assessed from the government’s e-tendering website, PGCIL has issued four tenders totalling Rs 58.2 million to install hoardings across several districts of Odisha. NHPC will do the same across Jammu & Kashmir, including Leh and Ladakh. The total tender volume of NHPC stands at Rs 2.6 million.
Thermal power giant NTPC's e-tendering website also lists tender issued for Saubhagya but are of a different kind. NTPC is providing last-mile electricity connections to about a dozen districts in Odisha.
Under the Rs 163.2-billion Saubhagya scheme, the government would provide “last mile electricity connectivity to all rural and urban households.”

Centres asks all govt offices, PSUs in NCR to switch to electric vehicles

All the central government departments and PSUs located in NCR have been asked to switch to e-vehicles for local travels by the power ministry, as India plans to have 30 per cent of the total vehicle fleet running on batteries by 2030.
The centre has decided to push electrical mobility in a big way as it is environment-friendly and will also reduce the dependence of oil imports, said a letter written by Power Minister R K Singh to different ministries.
The government has decided that by 2030, 30 per cent of the total vehicle fleet in the country should be electrical.
As per the letter, "in the first phase, it is proposed that all ministries/departments of Government of India and their attached/subordinate offices/PSUs located in the NCR, may switch over to electricity mobility for local use i.e for the vehicles which will run within NCR".
Energy Efficiency Services Ltd (EESL), a joint venture of PSUs of power ministry, has placed an order for 10,000 electric vehicles.
Charging facilities for e-vehicles are also being set up at various locations, the letter said.
"It is requested that your ministry, attached/subordinate offices/PSUs may assess their requirements and communicate the same to EESL," it added.
Ministries have been given an option to either purchase the vehicle at the price discovered by the EESL or hire them to form it.
As per the power ministry, electric cars run for 130 km on a single charge and the cost of operations is "one-third" that of a petrol car.
More ever e-vehicles will also help in reducing air pollution, which has become a big problem in the NCR.