MASSIVE: Vijaya Bank and Dena Bank to merge with Bank of Baroda from April 1

In its three-way amalgamation to create the third-largest lender of the country, Vijaya Bank and Dena Bank will merge with Bank of Baroda (BoB) from April 1.

Commencing Monday, the branches of Vijaya Bank and Dena Bank will function as BoB outlets.

Taking it to Twitter, The Reserve Bank of India declared the development and legal functioning on the merger.

Here’s what their tweet read:

For every 1,000 shares of Bank of Baroda, Shareholders of Vijaya Bank will get 402 equity shares held while Dena Bank will receive 110 shares as per the Scheme of Amalgamation.

The amalgamation will be the first-ever three-way consolidation of banks in India, with a combined business of Rs 14.82 lakh crore with the amalgamated bank (Bank of Baroda) making it India's third largest public sector bank after State Bank of India (SBI) and ICICI Bank.

READ | Cabinet Clears Merger Of Dena Bank, Vijaya Bank With BoB

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.

The transferee bank, BoB will be ensuring that the interests of all transferring employees and officers of Vijaya Bank and Dena bank are protected.

"Customers including depositors of Vijaya Bank and Dena Bank will be treated as customers of Bank of Baroda with effect from April 1, 2019," the Reserve Bank of India (RBI) had said in a statement on Saturday.

The announcement of the three-way merger was among several reforms initiatives undertaken by Financial Services Secretary Rajiv Kumar to make public sector banks (PSBs) healthy, robust and globally competitive.

"The consolidation will help create a strong globally competitive bank with economies of scale and enable realization of wide-ranging synergies", said Finance Minister Arun Jaitley upon announcing the merger.

The merged entity will have better financial strength, Financial Service Secretary Kumar had said adding that its net NPA ratio will be at 5.71 percent, significantly better than PSBs' average of 12.13 percent.

(With PTI inputs)