Vijaya-BoB-Dena Bank Merger Is Official Now

New Delhi: Days after facing stiff opposition from protesting bank employees, the final hurdle in the way of the merger of Bank of Baroda (BoB), Dena Bank and Vijaya Bank has been cleared. The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the amalgamation of the three public sector banks (PSBs), with Bank of Baroda as the transferee bank and Vijaya Bank and Dena Bank as transferor banks. The amalgamation will be the first-ever three-way consolidation of banks in India, with the amalgamated bank being India's second largest PSB.

A statement released by the Ministry of Finance said, "The amalgamation will help create a strong globally competitive bank with economies of scale and enable the realisation of wide-ranging synergies. Leveraging of networks, low-cost deposits and subsidiaries of the three banks have the potential of yielding significant synergies for positioning the consolidated entity for a substantial rise in customer base, market reach, operational efficiency, a wider bouquet of products and services, and improved access for customers."

Every permanent and regular officer or employee of the transferor banks shall become an officer or employee and shall hold their office in the transferee bank in a way that the pay and allowance offered to the employees/officers of transferor banks shall not be less favourable as compared to what they would have drawn in the respective transferor bank.

The merger will come into force on April 1. Upon commencement, the undertakings of the transferor banks as a going concern shall be transferred to and shall vest in the transferee bank, including, inter alia, all business, assets, rights, titles, claims, licenses, approvals and other privileges and all property, all bor­rowings, liabilities and obligations.

Every permanent and regular officer or employee of the transferor banks shall become an officer or employee and shall hold their office in the transferee bank in a way that the pay and allowance offered to the employees/officers of transferor banks shall not be less favourable as compared to what they would have drawn in the respective transferor bank.

The amalgamated bank will be better equipped in the changing environment to meet the credit needs of a growing economy, absorb shocks and capacity to raise resources, the government said. "Economies of scale and wider scope would position it for improved profitability, wider product offerings, and adoption of technology and best practices across amalgamating entities for cost efficiency and improved risk management, and financial inclusion through wider reach," the statement read.