CABINET APPROVES MERGER OF VIJAYA BANK, DENA BANK WITH BANK OF BARODA
In News :
- The Cabinet has approved the merger of Vijaya Bank and Dena Bank with Bank of Baroda. Vijaya Bank and Dena Bank are transferor banks and BoB is the transferee bank.
- The amalgamation will be the first-ever three-way consolidation of banks in India, with the amalgamated entity emerging as the country’s second largest public sector bank.
Scheme of Amalgamation :
- Union Cabinet approved a scheme of amalgamation for the same and the board of the respective banks giving their nod to the share swap ratio.
- The fair equity share exchange (share swap) ratio for the amalgamation is: 402 equity shares of ₹2 each of BoB for every 1,000 equity shares of ₹10 each of Vijaya Bank; and 110 equity shares of₹2 each of BoB for every 1,000 equity shares of ₹10 each of Dena Bank.
- The scheme will come into effect from 1st of April this year. The pay and allowances and services of the employees of all three banks will remain same as earlier.
The Need for the Merger :
- The move will help create a strong globally competitive bank with economies of scale and enable the realization of wide-ranging synergies, leveraging of networks and low-cost deposits and substantial rise in customer base and operational efficiency.
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