Kolkata, Sep. 14 (PTI): The amalgamated entity of United Bank of India (UBI), Punjab National Bank (PNB) and Oriental Bank of Commerce (OBC) will come into effect from April 1 next year, a top official said on Saturday.

The merged unit, likely to have a new name, will be the second largest bank in the country after State Bank of India (SBI) with a total business volume of INR 18 lakh crore.

“The amalgamation process will take some time and the new entity will start functioning from April 1, 2020,” MD and CEO of UBI, Ashok Kumar Pradhan, said.

The three banks held a customer meet here, which was attended by Chander Khurana, GM of Punjab National Bank and Binay Kumar Gupta, GM of Oriental Bank of Commerce.

The lenders said that there will no retrenchment of staff in the merged entity, and also ruled out the possibility of bringing in Voluntary Retirement Scheme (VRS).

Pradhan later told reporters that the combined staff strength post the amalgamation will be 1 lakh with 11,400 branches.

Finance Minister Nirmala Sitharaman had on August 30 announced the consolidation of 10 state-run banks into four large-scale lenders.

Pradhan said the amalgamation process will require legal and regulatory compliances, besides approval of the three banks’ boards.

“During the interim period, the three will continue to function independently,” he said.

The government has already announced a capital infusion of INR 16,000 crore into PNB and INR 1,600 crore into UBI.

“The merged entity will be adequately capitalised and comply with basel requirements for the next three years,” the senior UBI official said.

To a query, Khurana said the average net NPA of the three banks is 6.67 per cent, which is expected to fall below 6 per cent post the amalgamation.

On the share-swap ratio, Pradhan said that valuers will be appointed separately, following which a merchant banker will determine the fair value. “After that, the swap ratio will be decided,” he said.