Bank merger: What customers should do to stay safe

New Delhi, Sep 26: In an attempt to make India's banking system more survivable, powerful and secure, the government announced that it has planned to merge three state-run banks Vijaya Bank, Dena Bank and Bank of Baroda. This will create the country's third-largest bank, and capital support will be provided to the merged entity by the government.

This is not the first time a bank amalgamation process has taken place. In 2017, State Bank of India became much larger after engulfing five associates and the Bharatiya Mahila Bank. The first of the seven mergers between SBI and its associate banks was the amalgamation of SBI and State Bank of Saurashtra in 2018.

However, a bank merger isn't all bad news for customers and may actually have no impact at all. On a positive note, the acquisition can result in having access to more branches and ATMs than the customer had access to previously. So here is what customers should do after bank merger.

Don't panic

Don't panic...it's just a merger! Nothing significant changes at the consumer level aside from new deposit slips and a new sign. But even if changes are coming, the merging of two banks' systems takes time. In other words, you will probably not feel the effects for at least several months.

Know rules of the New Bank

After acquisition of banks, it's better to know the new bank (merged entity) thoroughly with free and chargeable services, interest rates for deposit and borrowing, etc.

Look for notifications

If you hear the news that your bank is going to be acquired or merge with another institution, be on the lookout for notifications or communications in the mail or via email. The acquiring bank should notify you about any changes in your account structure, fees or interest rates so you can be prepared before the changes take effect. In some cases, customers can request a waiver to avoid changes in the terms of their accounts.

Around this time there are possibilities of fraud emails circulated so stay alert and don't share your account details, internet banking id and pin, etc.

Update IFSC code of the new bank

One key thing you would need to keep in mind is that your account number and the associated details such as the IFSC code would change post-merger of the banks. So, you would need to update it wherever you use it. However, the banks would give enough time to customers and advance warning to get this done within the stipulated period.

Track changes in your existing loan account and deposit rates

As the bank merging process continues, significant changes to various types of accounts will be announced. Pay close attention to all e-mail and paper correspondence you receive from the new bank. Be wary of e-mail phishing hoaxes, however.

Determine if you need to stay or go

Once you are made aware of the changes, decide whether you can accept them or if you need to find a new bank. Perhaps the changes are minor or your particular type of account is unaffected. If that is the case, consider staying since moving between banks can be a hassle.