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Staff have to be informed of benefits of the merger, says Vijaya Bank MD & CEO
A day after the mega merger announcement, R.A. Sankara Narayanan , MD & CEO of Vijaya Bank, speaks on the immediate challenges on hand . Excerpts :
What benefits do you see from this merger?
The Centre was thinking of stronger and bigger banks for the last two years. Probably they wanted to make an experiment by consolidating these three banks. This will be the third biggest bank and will help the combined entity improve the volume of business, reduce NPA and increase the overall efficiency and profitability.
Vijaya Bank is one of the two profitable banks. How will the merger benefit the bank?
No doubt Vijaya Bank is one of the strongest banks. Bank of Baroda is equally strong. These two strong bank joining with Dena Bank will definitely add value to them and their stakeholders.
What is the next step?
First, we will go to the board for approval. May be in the next 10-15 days, we will have our board meeting. The government has said the identity and the brand equity of the banks will be maintained. So, we have to discuss how it can be ensured.
How do you address the human resource challenges arising out of the merger?
Any amalgamation or takeover will require the full support of the staff at all levels. We have to rightly inform them of the benefits of the merger and assure them that there will be no negative impact on any of the staff … on their assignments, perks, rolls and careers. If that can be assured and addressed properly… after all, all the banks in India have similar products and services. Definitely, employees’ interests will be taken care of and the Finance Minister has assured that the best of the staff benefits across the three banks will be provided to the staff. When that assurance is there, there is no need to worry about the continuity. There will be no threat of immediate closure.
Will there be any consolidation of branches?
The combined entity will have around 9,500 branches. At worst, depending on the potential and business, maximum 500 branches could be impacted. As far as Vijaya Bank is concerned, it is predominantly in the south where other banks do not have that much presence. So, there is absolutely no worry for individual banks on overlapping. We will address it based on the benefits and requirements.
Will the combined entity require capital infusion?
The current capital adequacy ratio for the consolidated entity is 12.5%. This is sufficient, well above the regulatory requirement.
