Bank of Baroda has become the third-largest lender in the country after the completion of its amalgamation with Dena Bank and Vijaya Bank. This is the first ever three-way amalgamation in India in the banking sector, and it is effective from today (1 April 2019). As a result of this merger, Vijaya Bank and Dena Bank will function as Bank of Baroda outlets from today onwards.
The consolidated bank will have a total of 9,500 branches and 85,000 employees catering to the needs of more than 12 crore customers in the country. The bank will have a total of 13,400 ATMs located in different parts of the country. The business mix of the consolidated bank is estimated to be around Rs.15 lakh crore, which comprises deposits worth Rs.8.75 lakh crore and advances worth Rs.6.25 lakh crore.
As a part of the amalgamation, shareholders of Vijaya Bank received 402 shares of Bank of Baroda for every 1,000 shares they had held. Dena Bank shareholders, on the other hand, received 110 shares for every 1,000 shares they had held.
The government announced the amalgamation of these three banks in September 2018. With this merger, the government aims to bring down the bad loans affecting the sector. Moreover, this will also help the banking industry revive its credit growth. To facilitate the merger even further, the government has decided to inject over Rs.5,000 crore into Bank of Baroda to enhance its capital base.
Following this merger, the number of public sector banks in the country has come down to 18. Union Finance Minister, Arun Jaitley, stated that this merger will create a strong bank that could compete on a global level.
This is the second such amalgamation in the banking industry in India. Two years ago, India’s largest lender State Bank of India (SBI) merged with five of its associate banks and the Bhartiya Mahila Bank.
Source: Economic Times