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Delhi HC urges govt to respond to plea challenging Vijaya-BoB-Dena bank merger

PW Bureau

India last year announced plans to amalgamate three state-run lenders in an effort to clean up the country’s banking system New Delhi: The Delhi High Court has urged the Central government to respond to an appeal against the proposed merger of three state-run lenders — Bank of Baroda, Dena Bank and Vijaya Bank — which is set to take effect from April 1. India last year announced plans to amalgamate the three banks in an effort to clean up the country’s banking system. The decision comes after the Delhi HC agreed to hear a plea of All-India Bank Officers’ Confederation (AIBOC), challenging the government’s proposal to merge the three public sector banks, last year. A bench of Justice Ravindra Bhat and Justice AK Chawla issued the notice. The petition also challenged the process through which the amalgamation of the state banks has been undertaken.
“Section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 lays down the procedure by which the Central government, after consultation from the Reserve Bank of India, may establish a scheme of amalgamating commercial banks.”
“Section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 lays down the procedure by which the Central government, after consultation from the Reserve Bank of India, may establish a scheme of amalgamating commercial banks,” the petition said. “However, no such scheme has been established in the instant case and the decision has been made to give the appearance as if the Boards of the Respondent Nos. 3-5 Banks (Vijaya Bank, Dena Bank and the Bank of Baroda) have taken a voluntary and autonomous decision to amalgamate themselves into a single entity.”