NEW DELHI: The Indian government on Monday announced the amalgamation of three public sector lenders Bank of Baroda, Dena Bank and Vijaya Bank.The merged entity or amalgamated bank would be India’s third largest.
The decision was taken at the meeting of a ministerial panel headed by Finance Minister Arun Jaitley which oversees merger proposals of state-owned banks.
The government will continue to provide capital support to the merged entity.The government expects that the process of amalgamation would be completed by the end of this financial year.
The government owns majority stakes in 21 lenders, which account for more than two-thirds of country’s banking assets.The merger of these three lenders follows the merger of State Bank of India and its associate banks in 2017.
The combination of Bank of Baroda-Dena Bank-Vijaya Bank will create a lender with a nationwide reach. While Bank of Baroda already has a wide spread network, Dena Bank and Vijaya Bank are more regionally focused.
Finance Minister Arun Jaitley said that the idea is to merge two good banks with one weak bank, without compromising with the working conditions and services of the banks.There will be no adverse impact on employees of merged entity, the Finance Minister added.
Department of Financial Services Secretary Rajeev Kumar said that the new bank will be strong competitive bank with economies of scale.
