Millennium Post

Cabinet clears Vijaya Bank, Dena Bank, BoB merger

Cabinet clears Vijaya Bank, Dena Bank, BoB merger

New Delhi: 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.

The government said in a statement that as per the scheme of amalgamation, Bank of Baroda would 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.

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.

"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.

All permanent and regular officials of Vijaya Banks and Dena Bank will also be transferred to the merged entity.

The board of Bank of Baroda will "ensure that the interests of all transferring employees and officers of the transferor bank are protected".

The merger will help create a strong, globally competitive bank with economies of scale and enable the realisation of wide-ranging synergies. The public at large will benefit regarding enhanced access to banking services, the government noted.

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 an immediate settlement of wage negotiations.

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.

Next Story
Share it