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Is Your Bank Merged? Things You Need to Take Care of

In August 2019, the government announced the proposal to merge 10-state-owned banks. From 1st April 2020, these banks will operate as four new entities. After the merger of five associate banks with State Bank of India and the merger of Dena Bank and Vijaya Bank with Bank of Baroda, the merger of weak state-run banks with larger PSU banks has finally gone through. The government believes that the merger of the 10 public sector banks into four big banks to boost economic growth. While it may take some time for the banks to carry out branding and marketing activities, the banks will operate under the lead banks.

Oriental Bank of Commerce and United Bank will merge into Punjab National Bank, Syndicate Bank with Canara Bank, Allahabad Bank with Indian Bank, and Andhra Bank and Corporation Bank with Union Bank of India. After the mergers, the country will have 12 public sector banks, including the State Bank of India and the Bank of Baroda. Bank of India and Central Bank of India will remain independent.

While the merger may be good for the economy, the bank customers have to take care of a few things so that their banking transactions and banking facilities availed by you can continue uninterrupted.

You can make a list of all the accounts and standing instruction mandate that you have with the bank whether it is a savings account, fixed deposits, loans, linked insurance plans and systematic investment plans, etc.

Here are some things that you should keep in mind if your bank is going to be merged with a different bank:

Rate on deposits may change

The interest rate given on savings account varies from bank to bank. Hence, if your bank is getting merged with another bank, the effective interest rate on savings bank will be that of the newly merged entity. However, interest rates on fixed deposits are likely to remain unchanged as it is considered a contract.

Read: Top Banks that offer High Interest on Savings Accounts

Your IFSC code and bank account number may change

After the merger with a different bank, the IFSC code and the account number are most likely to change. Hence, you need to check if your salary or dividends is automatically credited to this account or if you have any auto-debit standing order such as Systematic Investment Plan(SIP), insurance premium or any utility bills such as electricity bill, gas bill, etc. It is better to be safe than sorry. Hence, it is necessary to change the bank account and let the authorities know about the change.

While sometimes, you will be able to do the change online, in other cases, you may have to call your broker or agent to get the changes done. In the case of existing SIP, you may have to submit fresh SIP registration forms. Also, you have to set up new auto-debit standing instructions for your utility bills.

Check the IFSC code here.

Effect on loans

Are you worried about the impact of the merger on your loan interest rates? You don’t have to worry about your loan EMI shooting up. It is because, like fixed deposits, loans are also considered as contracts. If your loan is linked to MCLR, the interest rate would be reset at the end of the reset period that you have selected. However, it mostly depends on the bank and how they want to manage the MCLR.

New cards and cheques

After the bank merger, you will receive a new debit card and cheque books. If the bank does not provide one, then you need to apply for one as your old debit card and cheque book won’t be viable. You can also get a new credit card.


So if your bank account is merged with another bank, take care of auto-debit and credit standing instructions. Also, be sure to provide your new bank details to the concerned authorities and people for seamless transactions.


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