3-bank merger: BoB will be net job creator
Mayur.Shetty@timesgroup.com
Mumbai:02.04.2019
The complete integration of Dena Bank and Vijaya Bank with Bank of Baroda (BoB) is expected to take nearly 18 months. But customers will reap the benefits much earlier. BoB will be providing cash deposit and withdrawal facility in all branches by May. In an interview with TOI, BoB MD & CEO P S Jayakumar speaks of what customers, employees and investors can expect. Excerpts:
What is the timeline for the integration?
The ATM networks have already been merged and customers will not face any charges. The merger of the three treasuries is effective today (April 1). The core banking integration will take 12 to 18 months. This was the time it took us to migrate from Finacle 7 to Finacle 10 (versions of the core banking software) — 12 months for preparation and six months for stabilisation of the platform. But customer experience in terms of consistency in various branches will be achieved much earlier. The first set of interoperable functions will be rolled out in the first week of May. These will include cash deposits, cash withdrawals, fund transfer and obtained statement of account. We have enabled this by connecting the data centres.
When will you rationalise branches? Do you feel there will be a need for a voluntary retirement scheme (VRS)?
Before we migrate branches, we must meet the technology preconditions for interoperability. We are unlikely to reduce the number of branches but may relocate them to markets where we are not present. For instance, in Horniman Circle (in Mumbai), we have two branches next to each other. We may relocate one of them to Navy Nagar or Malabar Hill. But in the next six months, I do not see this happening. We need more people. There will be re-skilling as we need more people on the sales side. We will be net job creators. As they say, you can’t shrink to glory.
Will you review the current partnership for selling third-party products?
For life insurance, our own group company (IndiaFirst Life) will be the primary provider. As far as wealth management is concerned, it is an open architecture.
Will the employee costs change because of the merger? How will you manage cultural challenges?
The government’s amalgamation statement makes it clear that the better of the three will be adopted. The compensation structure is almost identical, but there are areas like loan policy and insurance benefits that had to be rationalised. Other than that, the wage structures are almost identical. Culturally, there are a lot of similarities. So long as we can ensure that promotions and responsibilities are based on merit and not dependent on the predecessor bank, the cultural integration will happen faster.
What business would you look to grow in the merged bank?
We will pursue sources of growth that do not necessarily call for capital such as fee income lines — forex business, government business and remittances. The idea is to serve the target market, not just by merely giving them a loan. In retail, it will continue to be mortgages, education, personal loans and auto loans. We have invested a lot in analytics and the delivery platform for cross-selling. This will help us identify customers and sell more efficiently without formfilling or one more round of KYC.
Mayur.Shetty@timesgroup.com
Mumbai:02.04.2019
The complete integration of Dena Bank and Vijaya Bank with Bank of Baroda (BoB) is expected to take nearly 18 months. But customers will reap the benefits much earlier. BoB will be providing cash deposit and withdrawal facility in all branches by May. In an interview with TOI, BoB MD & CEO P S Jayakumar speaks of what customers, employees and investors can expect. Excerpts:
What is the timeline for the integration?
The ATM networks have already been merged and customers will not face any charges. The merger of the three treasuries is effective today (April 1). The core banking integration will take 12 to 18 months. This was the time it took us to migrate from Finacle 7 to Finacle 10 (versions of the core banking software) — 12 months for preparation and six months for stabilisation of the platform. But customer experience in terms of consistency in various branches will be achieved much earlier. The first set of interoperable functions will be rolled out in the first week of May. These will include cash deposits, cash withdrawals, fund transfer and obtained statement of account. We have enabled this by connecting the data centres.
When will you rationalise branches? Do you feel there will be a need for a voluntary retirement scheme (VRS)?
Before we migrate branches, we must meet the technology preconditions for interoperability. We are unlikely to reduce the number of branches but may relocate them to markets where we are not present. For instance, in Horniman Circle (in Mumbai), we have two branches next to each other. We may relocate one of them to Navy Nagar or Malabar Hill. But in the next six months, I do not see this happening. We need more people. There will be re-skilling as we need more people on the sales side. We will be net job creators. As they say, you can’t shrink to glory.
Will you review the current partnership for selling third-party products?
For life insurance, our own group company (IndiaFirst Life) will be the primary provider. As far as wealth management is concerned, it is an open architecture.
Will the employee costs change because of the merger? How will you manage cultural challenges?
The government’s amalgamation statement makes it clear that the better of the three will be adopted. The compensation structure is almost identical, but there are areas like loan policy and insurance benefits that had to be rationalised. Other than that, the wage structures are almost identical. Culturally, there are a lot of similarities. So long as we can ensure that promotions and responsibilities are based on merit and not dependent on the predecessor bank, the cultural integration will happen faster.
What business would you look to grow in the merged bank?
We will pursue sources of growth that do not necessarily call for capital such as fee income lines — forex business, government business and remittances. The idea is to serve the target market, not just by merely giving them a loan. In retail, it will continue to be mortgages, education, personal loans and auto loans. We have invested a lot in analytics and the delivery platform for cross-selling. This will help us identify customers and sell more efficiently without formfilling or one more round of KYC.
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