Merger of Equals: The Amalgamation Story of Indian Bank and Allahabad Bank

Case Solution

S. Ramnarayan, Saumya Sindhwani, Geetika Shah, Anusha Parihar
Indian School of Business ()

On August 30, 2019, the Treasury Department of the Government of India (GoI) announced the merger of ten nationalized banks into four. Indian Bank and Allahabad Bank would be merged into a single unit, and the new merged bank had to go into operation on April 1, 2020. Merge two very different banks with thousands of branches and employees in a given time The window would be complex enough under normal circumstances, but the challenge was exacerbated by the emergence of COVID19 and the subsequent national shutdown in March 2020. Padmaja Chunduru, Managing Director (MD) and Chief Executive Officer (CEO) of Indian Bank, was given the daunting task of overseeing the fusion process. The case study describes in detail the actual integration process and the extensive planning and implementation that goes with it. It illustrates the role of the Integration Management Office (OMI) as a central point of information dissemination and as an authorized body in the merger process. In addition, the myriad challenges of integrating staff into the merger process, managing the IT / banking system, streamlining branches, and integrating clients are presented, as well as steps to overcome them. The COVID19 pandemic emerged as an unknown center of the integration process and required Chunduru and his team to rethink various aspects of the integration plan and strategy. The case study concludes with the actual mechanics of the fusion process. With the worst of the COVID19 crisis behind him, Chunduru aims to build a bank of the future. Due to streamlining in various areas, the Bank of India is not only better positioned financially than before, but has also formulated its vision as a future-ready bank. How could the insights of the integration process become a continuous process and be part of the DNA of the organization? These were the central questions Chunduru and his team had to face.

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