The government on Wednesday approved the merger of Dena Bank and Vijaya Bank with Bank of Baroda (BoB) to make it a globally competitive lender.
With the merger, BoB will become the third largest bank after State Bank of India and ICICI Bank.
"There will be no impact on the service conditions of the employees and there will be no retrenchment following the merger," Union Law Minister Ravi Shankar Prasad told reporters about decisions taken by the Union Cabinet.The merger has been designed to make BoB as merged entity, a globally competitive lender, Prasad added.
The Press Information Bureau also tweeted:
Here is the official press release from the Centre on the merger:
The Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the scheme of amalgamation for amalgamating Bank of Baroda, Vijaya Bank and Dena Bank, with Bank of Baroda as the transferee bank and Vijaya Bank and Dena Bank as transferor banks.
The amalgamation will be the first-ever three-way consolidation of banks in India, with the amalgamated bank being India's second largest Public Sector Bank.
The amalgamation will help create a strong globally competitive bank with economies of scale and enable realisation of wide-ranging synergies. Leveraging of networks, low-cost deposits and subsidiaries of the three banks has the potential of yielding significant synergies for positioning the consolidated entity for substantial rise in customer base, market reach, operational efficiency, wider bouquet of products and services, and improved access for customers.
Key points of the Scheme of amalgamation:
(a) Vijaya Bank and Dena Bank are transferor banks and BoB is transferee bank.
(b) The scheme shall come into force on 1.4.2019.
(c) Upon commencement of the scheme, the undertakings of the transferor banks as a going concern shall be transferred to and shall vest in the transferee bank, including, inter alia, all business, assets, rights, titles, claims, licenses, approvals and other privileges and all property, all borrowings, liabilities and obligations.
(d) Every permanent and regular officer or employee of the transferor banks shall become an officer or employee and shall hold his office or service therein in the transferee bank such that the pay and allowance offered to the employees/officers of transferor banks shall not be less favourable as compared to what they would have drawn in the respective transferor bank.
(e) The Board of the transferee bank shall ensure that the interests of all transferring employees and officers of the transferor bank are protected.
(f) The transferee bank shall issue shares to the shareholders of transferor banks as per share exchange ratio. Shareholders of the transferee bank and transferor banks shall be entitled to raise their grievances, if any, in relation to the share exchange ratio, through an expert committee.
(With PTI inputs)