Profit

Cabinet Clears Vijaya Bank, Dena Bank, Bank Of Baroda Merger: 10 Points

This marks the first-ever three way amalgamation in the country's banking sector.

 Share
EMAIL
PRINT
COMMENTS
Cabinet Clears Vijaya Bank, Dena Bank, Bank Of Baroda Merger: 10 Points

Merger of Bank of Baroda, Vijaya Bank & Dena Bank will come into force on April 1, 2019

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved the merger of state-run Vijaya Bank, Bank of Baroda and Dena Bank. This marks the first-ever three-way merger in the country's banking sector. The merged entity will become the third largest bank in the country, after government-owned State Bank of India and private sector lender ICICI Bank. The merger will come into force on April 1, 2019, the government said in its statement.
Here are five things to know:
  1. The government said in a statement that as per the scheme of amalgamation, Bank of Baroda will be the transferee bank while the other two public sector banks will be transferor banks. That means the businesses of Vijaya Bank and Dena Bank will be transferred to Bank of Baroda.
  2. The undertakings owned by Vijaya Bank and Dena Bank that will be transferred to the third state-run lender will include assets, liabilities, rights, titles, claims, licenses, approvals, privileges and properties.
  3. "There will be no impact on the service conditions of the employees and there will be no retrenchment following the merger," Union Minister Ravi Shankar Prasad told reporters. 
  4. All permanent and regular officials of Vijaya Bank and Dena Bank will also be transferred to the merged entity.
  5. The board of Bank of Baroda will "ensure that the interests of all transferring employees and officers of the transferor bank are protected".
  6. The merger will help create a strong, globally competitive bank with economies of scale and enable realisation of wide-ranging synergies. Public at large will benefit in terms of enhanced access to banking services, the government noted.
  7. The Bank of Baroda board approved a share exchange ratio under the merger subject to regulatory approvals. As part of the merger, Bank of Baroda will issue 402 shares of Rs 2 each for every 1,000 Vijaya Bank shares of Rs 10 each, and 110 shares of Rs 2 each for every 1,000 Dena Bank shares of Rs 10 each.
  8. The clearance to the amalgamation plan by the government comes after nearly 10 lakh bank officials called a strike on two days to protest against the proposed merger and press for immediate settlement of wage negotiations.
  9. The government had in September last year introduced its plan to merge the three lenders as part of efforts to tackle a pile of bad loans plaguing the banking sector. (Also read: Government proposes Bank of Baroda, Vijaya Bank and Dena Bank merger)
  10. At present, 21 state-run banks in the country - holding two-thirds of assets in the sector - account for the bulk of the record $150-billion of soured loans last year.

(With agency inputs)





Get Breaking news, live coverage, and Latest News from India and around the world on NDTV.com. Catch all the Live TV action on NDTV 24x7 and NDTV India. Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.

NDTV Beeps - your daily newsletter

Trending

Highlights

1
Merger to create third largest bank in country
2
Combination marks first-ever three-way merger in country's banking sector
3
Interests of employees to be protected, says government

................................ Advertisement ................................

................................ Advertisement ................................

................................ Advertisement ................................

Top