In general, bank merger occurs when any of the banks or sometimes both the banks like to improve their productivity, absorb the losses or raise the revenue. Generally, banks try to merge to enhance their abilities, services and work culture.
Impact of a bank merger
Bank mergers usually happen when the banks think about improving the economy and building up more revenue for the banks. There are both positive and negative impacts of a bank merger
Impact of bank merger on the customers
Bank merge may cause a slight inconvenience to the customers. Though the customers can enjoy the quality enhancement of the banks after the merger, there are also some confusions and negative situations that they have to go through
- Due to the merger, rules and regulations of the newly formed bank will be different and sometimes cannot be adapted by the customers.
- As both banks merge, some of the branches of any of the banks can get closed which may result in the disappointment of the customers if it includes the branch they got habituated with.
- The merger may also create confusion among the customers as on what to expect from the newly formed bank
- The charges and fees on their accounts can also vary as now the decision will be taken by both the banks as a single entity
Impact of bank merger on the employees
- Due to bank mergers, there can be a threat to employment as some of the branches of both the banks can get closed
- As the organizational culture will get changed all of a sudden, the employees might feel the inconvenience and might also get differences among themselves.
- Top positions of the banks will get reduced due to the lesser number of GMs, CMDs, etc., leading to slow promotions in the bank.
Keeping aside the effects mentioned above, banks merger has its own advantages. Here are the few benefits that can be taken into consideration.
Advantages of a bank merger
Makes the bank bigger as a whole
The merger of two banks obviously makes the bank a bigger entity in its operations as the resulting bank includes the features of both the banks together.
Availability of ATMs
As the two banks merge, you no need to worry about the withdrawals from the ATMs of the banks as you can find more ATMs available for you for the bank after the merger.
Due to the merger of banks, you can find more branches evolve making the operations of the banks extend in a broader way. Also due to the increase of branches, you will feel convenient to approach the branch that is available near you to avail your services.
Scale of the bank
The merger of a bank leads to improving its scale as the bank acquires more capital to work with when it comes to lending and investments. Not only this, the geographic footprint in which the bank operates also gets increased.
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Things to remember during a bank merger
Try to gain knowledge about the newly formed bank as early as possible. Know about the account details, the structure of the newly formed bank and other details by going through their website. This is very important as you need to know any new information regarding the bank.
For example, things you are offered for free may be payable now and the things you used to pay for may be obtained for free now. So, always keep an eye on the new bank’s process and details.
Take a decision to leave or stay
Once you came to know and went through a thorough verification of changes that have taken place in the formation of a new bank, then take a decision to leave or get accustomed to the new changes.
If the changes of the bank are minor or if the things like your account did not get affected, then choose to stay as changing the bank can cost you a lot of effort.
But on the other hand, if the charges are increased and if any of the new scenarios or programs of the new bank make you feel inconvenient then don’t think twice to choose a new bank that meets your requirements.
Be ready for the transitions you face
Bank merger always involves major or minor transitions. So, you need to be prepared and follow certain steps to face the transitions during a bank merger
- Divert the direct deposit you have with your current bank to another bank if you have any or disable the direct deposit on a temporary basis.
- Have some safe amount of cash at hand just in case if your debit card stops working.
- Have a detailed financial record of your account history to make sure that your details are safe even if the bank databases get corrupted during the transition.
- If you stop the services like direct deposit and bill payments, don’t forget to restart them once the merger gets completed.
Check : Online banking
On a whole, bank mergers can lead to an extreme rise or extreme fall, so bank merger can take place by weighing all the pros, cons and the impact it has on both the customers and the employees.