Merger Of Equals: The Amalgamation Story Of Indian Bank And Allahabad Bank

On August 30, 2019, the Ministry of Finance of the Government of India (GoI) announced the consolidation of ten nationalized banks into four. As part of this move, Indian Bank and Allahabad Bank were to be merged into a single entity, and the new amalgamated bank had to start operations on April 1, 2020. Amalgamating two very different banks with thousands of branches and employees within a pre-set time window would be complex enough under normal circumstances, but the challenge was compounded by the advent of COVID-19 and the ensuing national lockdown in March 2020. Padmaja Chunduru, Managing Director (MD) & Chief Executive Officer (CEO) of Indian Bank, was given the formidable task of overseeing the amalgamation process. The case study describes the actual integration process in detail and the thorough planning and execution involved. It illustrates the role of the Integration Management Office (IMO) as a central point of information dissemination and an empowered body in the merger process. It also lays out the myriad challenges of the amalgamation process — personnel integration, IT/banking system management, branch rationalization, and customer integration, and the steps taken to tackle each one. The COVID-19 pandemic came as an unknown midway through the integration process and required Chunduru and her team to rethink several aspects of the integration plan and strategy. The case study concludes with the actual mechanics of the amalgamation process. With the worst of the COVID-19 crisis behind them, Chunduru looks towards building a bank of the future. Having undergone rationalization in several areas, Indian Bank not only emerged in a better financial state than before but also laid down its vision as a future-ready bank. How could the learnings from the integration process be made a continuous process and become part of the organization’s DNA? These were the key questions facing Chunduru and her team.