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In the biggest consolidation exercise in the banking space, the government in August 2019 had announced the merger of 10 public sector lenders into four bigger and stronger banks. With this, the number of Public Sector Banks (PSB) in India will come down from 27 to 12. Such mergers form part of the government's strategy to encourage consolidation in the banking and finance sector, weighed down by significant non-performing assets that will see five significant banks emerging.

The plan would see a merger of the United Bank of India and the Oriental Bank of Commerce with the Punjab National Bank; the merger of the Syndicate Bank with the Canara Bank; the consolidation of Allahabad Bank with the Indian Bank; and Andhra Bank and Corporation Bank with Union Bank of India.

As part of this exercise, Chennai Headquartered Surana & Surana International Attorneys (SSIA) were appointed by Kolkata Headquartered Allahabad Bank (AB) to conduct complete due diligence including advising on the draft amalgamation scheme, all related statutory cum regulatory processes on the Chennai Headquartered Indian Bank (IB). The firm completed the assignment within the tight schedule with its committed team of qualified multidisciplinary professionals.

In accordance with the fair share exchange ratio authorized by the bank's board of directors, 115 equity shares of IB are to be exchanged for every 1,000 shares of AB, said IB in a recent regulatory filing. This two-way integration in the second round of Indian PSB mergers, to be effective from 1 April 2020, makes Indian Bank the country's 7th most significant public sector bank with a market size of around INR 8,080 billion (US$ 110 billion) and a combined network of 6104 branches. The current Indian Bank MD and CEO will become the combined entity's new chief.

The ratio of capital to risk-weighted assets (CRAR) of the merged entity would be about 13 percent. In the first year, the amalgamated entity is expected to see a loan growth of 12 per cent. Loans for housing, auto and education will get a boost through the Centralized Processing Centres for quicker and more efficient assessment cum decision making using latest technology. Both banks have a strong portfolio in agriculture. 

Performance of SSIA in earlier M&A assignments including the successful representation of Vijaya Bank in its merger with Bank of Baroda and Dena Bank (India's first-ever 3-way Public Sector Bank merger) were critical factors in the selection of this assignment. SSIA is a multidisciplinary firm that was first ranked among the Top 10 law firms of India by Legal Business of London and since then has been consistently ranked among the top by various national and international publications such as Asia Pacific Legal 500, International Financial Law Review, Legal Era, Business Today, Legal Business etc. It is recommended as the “go to” firm for domestic and international investors. It is recognized for responsiveness, cost-effective, practical solutions and multi-disciplinary advice. SSIA is the world’s first law firm to achieve SA 8000 and ISO 14000 certifications and the first in Asia to achieve ISO 9001 certification.