Cabinet clears merger of Vijaya Bank, Dena Bank with Bank of Baroda
New Delhi: The Union Cabinet today cleared the merger of Vijaya Bank, Dena Bank with Bank of Baroda. Following the merger of these state-owned banks, Bank of Baroda (BoB) will become the third largest bank of the country after SBI and HDFC.
“There will be no impact on the service conditions of the employees and there will be no retrenchment following the merger,” Union Law Minister Ravi Shankar Prasad told reporters.
The merger has been designed to make BoB as merged entity, a globally competitive lender, Prasad added.
‘No lay-off after merger’
“There will be no retrenchment of employees as the employees of Dena and Vijaya banks will be transferred to BoB. There will be no problem in service conditions,” he said.
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.
2nd bank merger in last 2 years
This is the second such exercise in the last 21 months. In the previous such mega merger, five associate banks and the Bharatiya Mahila Bank became part of the state-run State Bank of India on April 1, 2017, making the country’s largest lender among the world’s top 50 banks.
The government in September last year had announced the merger of these three banks. It was part of the government’s strategy to promote consolidation in the sector marred by loads of non-performing assets (NPAs). However, this is the first three-way merger in the public sector banking space has taken place.