Merger of Bank of Baroda, Vijaya Bank & Dena Bank are now approved by board of individual bank. The proposal of merger is now send to government of India for formal approval. Bank of Baroda MD & CEO states that the next step for the merger is getting government’s formal approval, followed by the swap ration.
The government had proposed the merger of the three banks with an aim to build a strong bank by combining the resources and management of two strong banks i.e. Bank of Baroda and Vijaya Bank with weaker bank Dena Bank.
The merger is expected to take four to six months to complete. Of the three banks, Dena Bank has the highest non-performing asset (NPA) ratio of 11.04% and lowest business of merely Rs 1.72 lakh crore. While other two banks — BoB and Vijaya — have low NPAs and higher businesses.
BoB has 5.4% NPA and Rs 10.2 lakh crore worth business and Vijaya Bank has 4.10% NPA and Rs 2 lakh crore worth business.
The Bank of Baroda , Vijaya Bank and Dena Bank merger will be the first-ever three-way consolidation of banks in the country, through the share swap.