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Bank of Baroda predicts smooth tech integration in merger

Papia Sengupta, executive director, Bank of Baroda

The bosses of India’s first ever three-way merger of state-run banks predict a smooth technological transition despite the process involving a mix of versions of the core banking platform.

While all three lenders use the same core banking platform developed by Infosys, Bank of Baroda is the only one that upgraded to Finacle 10. Dena Bank and Vijaya Bank are still functioning on an older version of the system-Finacle 7. However, the smaller two lenders will not be asked to update their systems.

“We are on Finacle 10 and they are on Finacle 7 but we don’t see much challenge there. Instead of asking them to go on Finacle 10, I think it will be easier for us to just pull their data,” Papia Sengupta, executive director, Bank of Baroda told IBS Intelligence.

Bank of Baroda upgraded its core banking to Finacle 10 last year.

Sengupta said that an entire evaluation of technological transition will be undertaken once all three bank boards approve the merger plan. “I don’t see any problems so far as technical issues are concerned. Sooner or later they will get evolved. There might be a disruption for a few days. But it will not be so sudden that there are any shockwaves. I don’t see that happening,” she said.

Last week, the Indian government announced a three-way merger to create a new entity that would displace ICICI Bank as the country’s third-largest bank with a combined business of Rs14.82 trillion. “The consolidation will help create a strong globally competitive bank with economies of scale and enable the realisation of wide-ranging synergies,” the ministry of finance said in a statement on 17 September.

“For any kind of merger, there is long-term gain and some short-term pain. But when these things happen, there is a lot of planning that goes into it and we try to see how the pain can be minimized,” said Sengupta, adding that issues around consolidating the three banks’ customers and employees are the two major aspects that are on priority. “If these two aspects are managed well I think the rest is a cakewalk,” she said.

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