PSU Bank merger: A look at the new rules and what you should do
If you are a customer of the amalgamating bank, you will have to get a new cheque book issued by the anchor bank
Customers of eight PSU banks, which are set to merge April 1 onward, will have an additional task in new financial year. The eight banks include Vijaya Bank, Corporation Bank, Andhra Bank, Syndicate Bank, Oriental Bank of Commerce, United Bank of India, Allahabad Bank and Dena Bank.
In a merger, an amalgamating bank or banks get merged with the anchor bank. So, depending upon your bank, there could be a change in the IFSC code of your bank, cheque book or passbook etc. If you are a customer of any of these banks, here’s what you need to know:
You will need a new cheque book:
If you are a customer of the amalgamating bank, you will have to get a new cheque book issued by the anchor bank. For example, Oriental Bank of Commerce (OBC) and United Bank of India (UBI) have been merged with Punjab National Bank (PNB). The cheque book of customers of OBC and UBI will become invalid April 1 onward and they’ll have to get a new one issued from PNB, which is the anchor bank. However, RBI has allowed certain banks like Syndicate Bank, to use old cheque book till June 30.
IFSC and MICR codes will change
Just like the cheque book, IFSC and MICR codes of the amalgamating banks will change. There’s also a possibility that the customers will be allotted a new account number. So, those who have been allotted a new account number or IFSC codes will have to update these details with third-party entities like mutual fund houses, D-mat account, I-T department, EPFO and so on, for uninterrupted transactions.
Deposits and loans
Interest rates of the anchor bank might be applicable for customers who have borrowed loans from amalgamating bank. There could be updated terms and conditions and rates. If you are not intimated yet, do check with the bank.
As far as fixed deposits are concerned, banks will not change the interest rates in the middle of the term. Your deposits are contracts with a pre-defined period and any change in structure of the bank will not result in any interest change for you.