The Indian government has decided to merge three public sector banks including Vijaya Bank, Dena Bank, and Bank of Baroda to form country’s third-largest lender, said a top government official on Monday (17).
The government’s move is expected to strengthen the banking system further in the country.
The boards of three banks will hold an analysis on the merger proposal, said Rajeev Kumar, secretary, Department of Financial Services. The official added that India’s banking sector needs reforms and the government has focused to fulfill the capital requirements of all banks.
The interest of the staff of the three banks will be protected and no employee would be left out after the proposed amalgamation. The three banks will continue to work independently until the completion of the merger, the official said.
The amalgamation is expected to raise the operational efficiency of the Indian banking system.
Earlier, five State Bank of India (SBI) associate banks merged successfully in a bid to raise the operational efficiency of the country’s banking system.
The stock of non-performing assets (NPAs) in India had declined by £2.21 billion in the quarter ended in June 2018. Banks have recovered £3.84bn during April to June period of the fiscal year 2019.
As of now, Bank of Baroda has a total business of £108.15bnfollowed by Vijaya Bank with £29.37bn and Dena Bank with £18.16bn.
Out of three banks, Bank of Baroda leads in the list of deposits with a deposit of £61.06 billion followed by Vijaya Bank with £16.52bn, and Dena Bank with £10.82bn.
Bank of Baroda has 5502 domestic branches followed by Vijaya Bank with 2129, and Dena Bank with 1858 branches.
As many as 56361 employees are working for Bank of Baroda whereas Vijaya Bank has a staff strength of 15874 followed by Dena Bank with an employees strength of 13440.
Vijaya Bank founded on October 23, 1931, in India’s southern coastal city, Mangaluru and later the bank established its corporate office in Bengaluru, the silicon valley of India.
The 110 years old bank of Baroda was founded by Maharaja HH Sir Sayajirao Gaekwad III in Vadodara of Gujarat state.
Dena Bank was established on May 26, 1938, by the family of Devkaran Nanjee under the name Devkaran Nanjee Banking Company. It renamed as Dena Bank when it turned as a public financial company in 1939.