R.A. Sankara Narayanan, managing director and chief executive officer of the Bengaluru-headquartered Vijaya Bank, has expressed confidence that the bank will immensely benefit from the amalgamation exercise executed by the government. He also pointed out that such a change will be initially met with some resistance, which will eventually settle down. He said that the government was a major stakeholder in Vijaya Bank with over 70 per cent stake and the amalgamation exercise is largely aimed at better governance. The combined entity will have a larger reach and the customers too will benefit from this exercise.
Last month, the Modi government had announced the merger of Bank of Baroda, Vijaya Bank and Dena Bank that is expected to create the second-largest PSU bank in the country.
“There are bound to be threats and worries. These are very common things and happen when smaller setups join with larger setups. I rather feel there is a whole set of new opportunities that this combined entity will create. Our board has given an in-principle approval for the amalgamation. Every bank has its set of strengths and weaknesses and any issues that may crop up initially are expected to get resolved gradually. I feel this combined entity will give positive results,” said Narayanan.
Narayanan further informed that the consolidation exercise is expected to be over in the next six to nine months timeframe and would primarily include the integration of IT and HR resources along with other resources. He said that all the customer accounts will be integrated into one. “I do not see any reduction in the number of bank branches or staff members. Rather, with more than 9,000 branches and a huge staff strength, the bank will emerge as a strong entity. The consolidation will also open new career opportunities for our employees and they may even get overseas exposure too. Each individual bank will try to leverage the strengths of each other. For instance, we are very strong in the south of India and the other banks are strong in other regions and thus can leverage each others network,” remarked Narayanan.
Speaking on the media reports about the rift between the RBI and the government, Narayanan expressed confidence in the regulator and said that there was no such rift. “I have worked across the world and I feel that the regulator in India is one of the best in the world and there is a very positive and proactive government monitoring in the system,” said Narayanan.
