A case study on the successful merger of two Indian state-owned banks, Indian Bank and Allahabad Bank, has been published by Harvard University in the United States. This is the first time Harvard has produced a case study on the merger of two Indian banks of identical size.
The success storey of Allahabad Bank's merger with Indian Bank is highlighted in a case study named "Merger of Equals" commissioned by the Indian School of Business (ISB).
The phrase ‘Merger of Equals' describes the full integration process, which included Indian Bank's meticulous strategic planning and execution, with a focus on the problems faced and solutions achieved. “Indian Bank has become a pan-India lender with considerable presence in the southern, northern, and eastern areas of the nation as a result of the merger," the lender said in a statement. Project Sangam, the consolidation effort, had a three-pronged approach to product/process, employee-customer communication, and IT integration. "As evidenced by the Bank's declining cost-to-income ratio, the merger's synergy benefits have begun to reflect in terms of cost efficiencies" (40.86 percent for QE June 2021). The Indian Bank claimed in a statement that "the integration of IT operations and systems has resulted in economies of scale through vendor rationalisation, finer pricing on AMCs, and improved operational efficiencies."
"We are privileged to witness our amalgamation process featured in the leading publication of one of the world's most prestigious institutions," stated Padmaja Chunduru, MD and CEO of Indian Bank.
This is a testament to the whole Indian Bank team's unwavering commitment and sincerity in achieving this strategic merger. We'd like to take this opportunity to congratulate ISB and Harvard Business Publishing for recognising Indian Bank's efforts.
The merger has provided Indian Bank with a unique opportunity to establish synergies between two banks with extensive histories. We hope that by reading this case study, readers will gain a better understanding of the whole picture of this outstanding merger."
While addressing the challenges of human capital, diverse cultures, and geographic locations, the two banks successfully amalgamated. Indian Bank is the country's sixth-largest public sector bank. The bank, which has its headquarters in Chennai and services over 10 crore customers, employs 41,557 people. Allahabad Bank and Indian Bank combined on 1 April 2020, with effect from that date.
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