AU Small Finance Bank-Fincare Merger: Whenever a bank merger takes place, it usually brings several changes for its customers. In the upcoming months, several aspects may change for you. Let’s delve into what you might expect:
Background of the Merger: In the small finance bank segment, the prominent bank AU Small Finance Bank is acquiring Fincare Small Finance Bank, leading to the amalgamation of both banks. The boards of both banks have approved this merger. The deal is set to be completed by February 1, 2024. Following this, it will become part of Fincare Small Finance Bank, which will include AU Small Finance Bank. Approval from shareholders, the RBI, and the Competition Commission of India is pending. The banks have stated that post-merger, the combined entity will serve 98 lakh customers and have 43,000 employees.
Changes for Customers:
While changes in the banks themselves are expected, it’s crucial to consider what changes might occur for customers of both banks after the merger. Whenever a bank merger occurs, it often leads to several adjustments for customers. It’s essential to stay connected with your bank and keep updated about the changes coming in the following months. Let’s explore:
- Debit/Credit Cards:
Customers of both banks might need to replace their debit and credit cards. However, you will likely continue using your current cards for some time. Card replacement may be necessary when the bank name changes, especially for customers of smaller banks.
- Card Mandate:
If you have set your card on auto-debit mode for various transactions, changes might occur. Details such as bank accounts and IFSC codes used for several transactions may be subject to modification.
- Cheque book:
Post-merger, if the bank’s name changes, customers from both banks might need to replace their checkbooks. However, if a merger occurs between a small and large bank and there’s no change in the larger bank’s name, customers from the smaller bank may need to replace their checkbooks.
- Interest Rate:
If you have a fixed deposit with the bank or have taken a loan, you’ll need to check if the new entity maintains the old interest rates or if there will be changes.
- Deposit Insurance:
Customers who had accounts in both banks and were receiving separate deposit insurance of up to ₹5 lakh on each will now only receive a total of ₹5 lakh on a single account after the merger.
It’s essential to stay informed about these potential changes and keep an eye on updates from your bank for a seamless transition during this period of transition.