Bank of Baroda, Vijaya Bank, Dena Bank to set up internal committees to merge operations

Bank of Baroda (BoB), Dena Bank and Vijaya Bank on October 24, 2018 decided to constitute internal committees to help integrate the functions of the banks before the merger happens.

These committees include committees on credit, human resources (HR) and information technology. The committees will comprise the Chief Executive Officers (CEOs) and Executive Directors of all the three banks.

The banks also decided to appoint three separate valuers to fix the swap ratios of merger. The valuer appointed by one bank will also evaluate the other two banks, before a common ratio is arrived at.

The merger of Bank of Baroda, Vijaya Bank and Dena Bank

• The Union Finance Ministry on September 17, 2018 announced the proposal to merge three public sector lenders - Bank of Baroda, Dena Bank and Vijaya Bank.

• The combined lending entity is expected to create India’s third largest bank with a total business of more than Rs 14.82 lakh crore, after the SBI and ICICI Banks.

• The amalgamation would be through share swap which will be the part of scheme of merger.

• The scheme of amalgamation will be laid before Parliament.

• This amalgamated entity will increase banking operations and expansion is inevitable. The three banks will continue to work independently post merger.

• The amalgamation would be carried out under Alternative Mechanism. Finance Minister Arun Jaitley, who heads Alternative Mechanism, assured capital support to the merged entity. Other members of Alternative Mechanism included Railway Minister Piyush Goyal and Defence Minister Nirmala Sitharaman.

• Post this merger, the number of PSU banks will come down to 19.

Government proposes merger of Bank of Baroda, Dena Bank and Vijaya Bank under Alternative Mechanism

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