Allahabad bank merge into Indian Bank, Reason behind merger

1. Allahabad bank merge into Indian Bank
Submitted by –
Paras Agrawal
BBAN1MG200
14
Submitted to –
MS. Shorya Gupta
Ass.Professor(SOM)
A Presentation On

2. History of mergers in Indian Banking
 Mergers of banks began in India in the 1960s in order to bail out the
weaker banks and protect the customer interests.
 The three banks are merged in 1921 to form the Imperial Bank of
India(IBI). After India's Independence day, Imperial Bank of India became
the State Bank of India(SBI) in 1955.

3.  Allahabad Bank was an Indian nationalized bank with its
headquarters in Kolkata, India. Founded in Allahabad in 1865
and nationalized by the government of India in 1969, the bank
provided banking and financial services for 155 years until it
was merged with Indian Bank in 2020. It was the oldest still
running joint stock bank in India until it's merger.
As of 31 March 2018, Allahabad Bank had over 3245 branches
across India. The bank did a total business of ₹3.8 trillion during
the FY 2017–18. The bank's market capitalization in June
2018 was US$573 million and ranked #1,882 on the Forbes
Global 2000 list

4.  Indian Bank is an Indian public sector bank,
established in 1907 and headquartered in Chennai. It
serves over 100 million customers with 39,734
employees, 5,721 branches with 5,428 ATMs and
Cash deposit machines.

5. Reason Behind Merger
 Seventh largest PSU bank,
 Total business size of Rs 8.08 lakh crore.
 Nationwide presence in South, North & East
 Business size will get doubled
 Will have high CASA and lending capacity

6. A Study on Customer Awareness on Merger of Indian
Bank with Allahabad Bank
Figure 2. Pre and post-merge performance of Indian bank and
Allahabad bank
In figure 2, pre and post-performance of the banks have been shown. And by the figu
can easily see that the bank after the merger has given a better performance.

7. Benefits of Merger
 Self-sufficiency: Bigger banks can better acquire funds from
the marketplace instead of depending on the government's
coffers.
 Rehabilitation: For clients' advantage, the loan monitoring
system in Public Sector Unit banks is being enhanced.
Challenges
• Decision-making process: It is anticipated that banks that
are merging would experience a delay in making decisions at
the highest level because senior executives will put all choices
on hold, resulting in a decrease in loan distribution in the
network.
Regional Cohesion: The combined banks serve just one
particular area of the nation in three of the four consolidation
instances. Nevertheless, the combination of Allahabad Bank
(which operates in the East and North) and Indian Bank (which

8. Conclusion
 we conclude that Government is aiming to reduce
the number of state-owned lenders and improving
their financial health. In this background proposed
merger will benefit to not only to bank but also to
economy as whole. Similarly the Bank Board
Bureau has been tasked with overseeing a
restructuring among other public sector banks to
speed of the long delayed process.