The FM of India, Nirmala Sitharaman, had announced earlier that some of the Public Sector Banks would be merged and this decision will bring down the total number of banks in the country from 27 to 12. Recently Bank of Baroda, Dena Bank and Vijaya Bank were merged while before that, SBI was fused with its sister banks. While this move will auger well for the economy, it is important for the customer to keep a few things in mind in the wake of this bank merger so that bank transactions can be carried on smoothly by the customer.
According to the MD of SVC Bank, the merger happens through a systematic, well-planned process. The money kept in the PSU banks remain unaffected in case of a merger which was noticed during previous mergers of SBI and Bank of Baroda.
In case of any changes, there will be official announcements and the banks will communicate with the customers through letters, emails and will update about locker facilities, loan accounts, savings and current account after the merger. It is quite possible that fraud emails would be doing the rounds at this point of time so customers should take caution in securing their banking password and PIN and refrain from responding to any emails with account details without confirming with the bank.
Updated account details
It is possible that IFSC details, customer Ids and account numbers may undergo a change and if there are accounts in more than one of the banks, especially within the various merging banks, then a single customer ID might be provided. In that case, the KYC must be updated. One should also update their phone and email ID to get intimations of these changes.
Once the new details have been provided by the banks, the third party entities also have to be notified like the income tax department, mutual funds, and insurance companies so that in case there are any auto-debit services you are using, they should be debited from the new account number provided. This is especially crucial if you have EMIs debited from your accounts each month and you have to notify your lender about it, as you do not want your monthly payments to go haywire.
There is a possibility that some of the internet banking facilities may undergo a change and the online banking portals of the merging banks might stop working when the merger happens. Depending on the policies of the new bank, it is possible that the old user ID and password may still be in use though it is a good idea to update oneself. The users might be redirected to a new website and one must confirm the login details to the correct bank website for the internet banking and not fall prey to phishing scams that have similar looking homepage like the banks.
With branch rationalization happening, some of the ATM branches might be shut down and there could be a disruption in the locker facilities as well. While existing credit and debit cards will continue to work, they might be changed after a point and you must personally collect the new card and PIN from the bank. The bright side would be that customers will be able to perform transactions in any of the branches of the merging banks.
Charges of new merged banks
Some services in banks are free while others may be chargeable, and it is possible that these charges will go up or down. There could also be a change in the minimum balance that one can have in their accounts and the penalty for maintaining that balance could also increase or decrease. While some of the rules may be changed immediately, some changes might come into effect after some time and so it would be a good idea to keep track of these things for at least up to 6 months to one year after the merger.
There will be no changes on the interest of fixed deposits after the merger, but once the maturity period is attained, the new interest could be different during renewal. Since all retail loans will be linked to external benchmarks from 1st of October, the customers will have the chance to shift to new interest during renewal, unless one continues with the MCLR in which case the loan will be linked to the new bank’s rates when reset is done.