According to report in a reform measure aimed at further consolidation, the government on Monday announced the merger of three state run banks Dena Bank, Vijaya Bank and the Bank of Baroda that will make it the country's third largest bank with a combined business of Rs.14.82 lakh crore. Meanwhile Finance Minister Arun Jaitley announced the merger proposal at a press conference saying that the respective boards of the three banks have been directed to consider the proposal at the earliest.
He said “The three banks will continue to operate as independent banks till the proposal is passed by the boards of individual banks and the name of the merged bank would be decided by them in the scheme of amalgamation”. Furthermore Jaitley said the merger would create a sustainable mega-bank which would be third largest in the country and the amalgamated entity would increase banking operations and its ability to go for further consolidation.
Furthermore this is the second such exercise in the last 18 months.
Meanwhile 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. Moreover
Jaitley said the government took a series of steps to tackle the NPA challenge
including the Insolvency and Bankruptcy Code "which was a defining moment
in creditor debtor relationship".