As the government in September proposed amalgamation of Bank of Baroda (BoB), Vijaya Bank and Dena Bank into the country...
As the government in September proposed amalgamation of Bank of Baroda (BoB), Vijaya Bank and Dena Bank into the country’s third-largest bank, BoB Managing Director P.S. Jayakumar said it may happen in four to six months. “Going by past practices, the merger may take four to six months. It can be speeded up also...it depends,” Jayakumar told reporters after Finance Minister Arun Jaitley and Financial Services Secretary Rajeev Kumar announced the proposal.
The envisaged amalgamation will be the first-ever three-way consolidation of banks in India, with a combined business of Rs 14.82 lakh crore. The combined entity will have a net NPA ratio at 5.71 per cent, better than public sector banks (PSB)’s average of 12.13 per cent. “With the benefit of scale working in, with greater distribution and more opportunities for products for costumers etc., a reasonable assumption is that there will be good opportunity to come but it is something that will happen in due course,” he said.
The boards of the three state-run banks are expected to meet shortly and consider the government’s proposal and decide the merger ratio and other details of the scheme of amalgamation. The government’s shareholding will be as per the merger ratio.