On August 30, 2019, India’s Finance Minister announced that Syndicate Bank would combine with Canara Bank to form one big bank. This new bank became the fourth-largest government-owned bank in India, with a huge amount of money (₹15.20 lakh crore) and 10,324 branches. The merger followed a law called the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, under Section 9. The plan was officially shared in the Gazette of India on March 4, 2020. This meant everything Syndicate Bank owned, like money, loans, and accounts, moved to Canara Bank. Customers probably noticed changes, like getting new account numbers or needing to update automatic payments. People with loans might have paid slightly lower interest rates with Canara Bank. Those who owned shares in Syndicate Bank got 158 Canara Bank shares for every 1,000 shares they had.
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Syndicate Bank and Canara Bank Merger Explained
The joining of Syndicate Bank with Canara Bank, which started on April 1, 2020, was a big step for India’s banking world. Announced by Finance Minister Nirmala Sitharaman on August 30, 2019, this merger created a stronger bank. This guide explains the merger in simple terms, focusing on the rules, what it meant for customers and others, and the changes people noticed, so everyone can understand.
Rules and Steps for the Merger
The merger followed a law called the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, specifically Section 9. This law allows the government to combine banks if it’s good for the public. The plan, called "The Amalgamation of Syndicate Bank into Canara Bank Scheme, 2020," was shared in the Gazette of India on March 4, 2020, and started on April 1, 2020. This plan said that everything Syndicate Bank had, its money, loans, and responsibilities would now belong to Canara Bank, and Syndicate Bank would no longer exist on its own.
The merger went through several steps:
On September 13, 2019, Canara Bank’s leaders agreed to the merger.
On March 4, 2020, India’s Union Cabinet gave the final okay, making sure everything followed the rules.
The Reserve Bank of India (RBI) helped make sure the merger was fair and safe for customers.
These steps and rules made sure the merger was clear, fair, and followed India’s banking laws, with the goal of making government banks stronger.
How the RBI and Rules Protected Customers
The RBI was a big part of the merger, making sure everything followed banking rules and customers were treated fairly. The Finance Minister promised that problems with technology, like automatic payments, would be fixed, so systems like Finacle, iFlex, and BaNCS worked together. This oversight made sure customers’ rights were safe during the merger.
Learn about Public Sector Bank Merger.
What the Merger Meant for Customers
The merger changed things for customers, especially those who used Syndicate Bank, as they became Canara Bank customers starting April 1, 2020. Here’s what happened:
1. People with Bank Accounts and Savings:
All Syndicate Bank accounts and savings moved to Canara Bank. Customers might have gotten new account numbers or IDs, so they needed to update things like automatic payments for taxes, insurance, or salaries.
Savings, including fixed deposits, stayed the same, but customers were told to check their account details to avoid any problems.
2. People with Loans:
Loans from Syndicate Bank moved to Canara Bank. The interest rates changed to match Canara Bank’s rates, called the Marginal Cost of Funds based Lending Rate (MCLR). For example, on August 31, 2019, Syndicate Bank’s rate was 8.75%, and Canara Bank’s was 8.70%, so some borrowers might have saved a little money.
Borrowers had to keep paying their loans, but now under Canara Bank’s rules, which kept things fair and legal.
3. People Who Owned Shares:
If you owned shares in Syndicate Bank, you got 158 Canara Bank shares for every 1,000 Syndicate Bank shares. This was part of the merger plan to make sure shareholders still had value in the new bank.
4. Keeping Agreements and Contracts:
All agreements, loans, and legal papers from Syndicate Bank became Canara Bank’s. This meant things like loans or guarantees didn’t stop, keeping everything stable and legal.
5. Changes in How Things Worked:
Automatic Payments and Cheques: Automatic payments (called ECS mandates) and cheques from Syndicate Bank still worked, but customers were told to set up new ones for things like monthly investments or loan payments. Old cheque books worked for 6–12 months after the merger to give people time to switch.
Credit and Debit Cards: Syndicate Bank cards worked at first, but customers might have needed new Canara Bank cards later to match the new bank’s system and branding.
Branches and ATMs: Customers could use Canara Bank’s bigger network, with 10,391 branches and 12,829 ATMs. Some branches might have closed, but overall, people had more places to bank.
6. What Customers Needed to Do:
Update account details with places like the tax department or employers for things like salary payments.
Set up new automatic payments for bills or investments.
Pay attention to any changes in loan rates, which might have saved money.
Get new credit or debit cards if the bank asks, to keep using them without issues.
Summary
The merger of Syndicate Bank with Canara Bank was done properly under India’s banking laws to create a stronger, better bank. Customers saw changes, like new account numbers or loan terms, but their rights and responsibilities were protected because everything Syndicate Bank had moved to Canara Bank. Shareholders got new shares, and customers could use more branches and ATMs. People were encouraged to update their details to keep banking smoothly, showing how the merger kept things fair and organized.
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Is Syndicate Bank Merger with Canara Bank?: FAQs
Q1. Are Canara Bank and Syndicate Bank merged?
Yes, Syndicate Bank merged with Canara Bank on April 1, 2020.
Q2. Is a Syndicate Bank cheque valid now?
Syndicate Bank cheques were valid for 6–12 months post-merger (until March 2021). Customers should use Canara Bank cheques now.
Q3. Who took over Canara Bank?
No one took over Canara Bank; it absorbed Syndicate Bank in the merger.
Q4. What is the IFSC code of Syndicate Bank after merger with Canara Bank?
Syndicate Bank IFSC codes were replaced with Canara Bank IFSC codes, starting with "CNRB" followed by a unique branch code.
Q5. Who is the CEO of Syndicate Bank?
Syndicate Bank no longer exists as a separate entity. The CEO of Canara Bank is Debasish Mukherjee.
