Centre to merge Baroda, Dena and Vijaya Bank

Centre to merge Baroda, Dena and Vijaya Bank

The centre on Monday 17th September proposed to unite the state owned banks Baroda, Dena Bank and Vijaya Bank to create India’s third largest bank as parts of reforms in the public sector banking segment.

The merger of these three banks follows the merger of State Bank of India and its associate banks in 2017.

The decision was taken at the meeting of a ministerial panel headed by Finance minister Arun Jaitley. The other members of the panel included Railways Minister Piyush Goyal and Defence Minister Nirmala Sitharaman.

“This major decision was taken by Alternative Mechanism today to unite Bank of Baroda, Dena Bank and Vijaya Bank. While making this suggestion, we have in mind that we don’t want a merger of what are relatively weak banks, “  Mr Jaithley said adding, “you can have two well performing banks  weak one in the amalgamation process and hopefully creating a mega bank which will be suitable, whose lending ability which will be far higher.

As per the local newspaper, Mr. Rajiv Kumar, secretary, Department of Financial Services said “The Alternative Mechanism took the view that aspirations of the fastest growing economy have to be supported by stronger and globally competitive banks with increased choices to the stakeholders. Accordingly, it was decided to consolidate the three banks.

The entity will also be positioned for substantial rise in consumer base, market reach and operational efficiency.

Mr Jaithley also stated that “We want to save all the banks. When you make a merger you want to make sure that the merged entity is a stronger entity. Therefore our capacity to subsume that weaker bank into the merged  entity , which will be a stronger bank, is the principal factor that weights with the government. Of course, we see the all India expanse so on….”, as per local newspaper.

The Secretary added that the employee interests will be protected and brand equity will be preserved. Capital support, if any, to make it a big and global bank will be ensued.

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