Cabinet Clears Vijaya Bank, Dena Bank, Bank Of Baroda Merger: 10 Points

The government said in a statement that as per the scheme of amalgamation, Bank of Baroda will be the transferee bank while the other two public sector banks will be transferor banks. That means the businesses of Vijaya Bank and Dena Bank will be transferred to Bank of Baroda.
The undertakings owned by Vijaya Bank and Dena Bank that will be transferred to the third state-run lender will include assets, liabilities, rights, titles, claims, licenses, approvals, privileges and properties.
“There will be no impact on the service conditions of the employees and there will be no retrenchment following the merger,” Union Minister Ravi Shankar Prasad told reporters.
The merger will come into force on April 1, 2019, the government said in its statement.
The merger will help create a strong, globally competitive bank with economies of scale and enable realisation of wide-ranging synergies, the government noted.
All permanent and regular officials of Vijaya Banks and Dena Bank will also be transfered to the merged entity.
The board of Bank of Baroda will “ensure that the interests of all transferring employees and officers of the transferor bank are protected”.
The clearance to the amalgamation plan by the government comes after nearly 10 lakh bank officials called a strike on two days to protest against the proposed merger and press for immediate settlement of wage negotiations.
The government had in September last year introduced its plan to merge the three lenders as part of efforts to tackle a pile of bad loans plaguing the banking sector.
At present, 21 state-run banks in the country – holding two-thirds of assets in the sector – account for the bulk of the record $150-billion of soured loans last year.