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US-based Harvard University has published a case study on the successful merger of two Indian state-owned banks, Indian Bank and Allahabad Bank. 

This is the first time that Harvard has published a case study on the amalgamation of two equal-sized Indian banks. 

The case study titled ‘Merger of Equals’ commissioned by Indian School of Business (ISB) emphasises the success story of the merger of Allahabad Bank with Indian Bank. 

‘Merger of Equals’ states the entire integration process which comprised of rigorous strategic planning and execution by Indian Bank, with impetus on the challenges faced and their answers found. “The merger has made Indian Bank, a pan-India lender with significant presence in southern, northern and eastern parts of the country," the lender said in a statement.

The amalgamation exercise ‘Project Sangam’ had a three-pronged approach on product/process, employee-customer communication and IT integration. 

"The synergy benefits of the merger have started reflecting in terms of cost efficiencies as evidenced from the decline in cost-to-income ratio of the Bank (40.86% for QE June 2021). The integration of IT operations and systems have also resulted in economies of scale through vendor rationalisation, finer pricing on AMCs and improved operational efficiencies," the Indian Bank said in a statement. 

Padmaja Chunduru, MD and CEO, Indian Bank said, "We are privileged to witness our amalgamation process featured in the leading publication of one of the most prestigious institutions of the world.

This is a testimony to the constant dedication and sincerity of the entire Indian Bank team which helped achieve this strategic merger. We would like to take this opportunity to thank ISB and Harvard Business Publishing for acknowledging the efforts of Indian Bank.

The merger has given Indian Bank a distinct experience of building synergies between two banks with vast legacies. We hope this case study will help readers understand the big picture of this exemplary merger."

The two banks merged efficiently while addressing the challenges of human capital, varied cultures, and geographic locations.

Indian Bank is the seventh-largest public sector bank in India. Established in 1907 and headquartered in Chennai, the bank serves over 10 crore customers with 41,557 employees. With effect from 1st April 2020, Allahabad Bank got merged into Indian Bank.

 

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