Dena, Vijaya and Bank of Baroda Merge To Form 3rd Largest Bank in India:
Government on 17th September 2018, Monday had informed that three public sector banks which includes Bank of Baroda, Vijaya Bank and Dena Bank will be merged together. With this, the country’s third largest bank will come into existence. This decision is part of the government’s efforts to liberate banks’ lending and accelerate economic growth. It is notable that last year the State Bank of India merged its five subsidiary units into its own self. Along with that, the women bank formed for women was also mixed.
Announcing the plan, Finance Minister Arun Jaitley said that this will strengthen the bank and its ability to provide loans will increase. Explaining the reasons for the merger, he said the investment of the companies is being affected due to the weakening of the banks’ debt position.
The Finance Minister said that many banks are in critical condition and this is due to the rise in excessive debt and stranded debt (NPAs). They said, “After the merger, the entity coming into existence will increase bank activities.” Mergers like SBI will not have any adverse effect on existing service conditions of the employees of the three banks.
After reviewing the economy, Finance Minister Arun Jaitley said: The government is firm on the fiscal deficit target
The government has a majority stake in 21 banks. These banks have more than two-thirds of the bank’s assets in Asia’s third largest economy. However, these public banks have a large share in the trapped debt. The area is affected due to this immersed debt and millions of rupees are required in the next two years to comply with global Basel-III capital regulations.
Financial Services Secretary Rajiv Kumar said in a press conference in the capital that the board of three banks will consider the merger proposal. “This merger will lead to better operational efficiency and customer service.