The Union Cabinet has officially approved the merger of Bank of Baroda (BoB), Vijaya Bank and Dena Bank. This is the first three-way public sector bank merger in the country that has been approved. As per the Union Law Minister, Ravi Shankar Prasad, the service conditions of employees will not be affected and retrenchments will not happen post the merger. Bank of Baroda (BoB) has also finalized its share swap ratio for merging with Dena Bank and Vijaya Bank.
Shareholders in Vijaya Bank will have a 402 equity share of Bank of Baroda (BoB) for every 1, 000 shares that are held. With regard to Dena Bank, the shareholders will be getting 110 shares for every lot of 1, 000 shares of Bank of Baroda (BoB).
The Government had previously declared the merger of Dena Bank and Vijaya Bank with Bank of Baroda which is the largest public sector bank amongst the three. The merged bank will be the second biggest PSB (public sector bank) in India after State Bank of India (SBI). This will help in building a bank which is more competitive globally. The merger will be effective from the 1st of April, 2019, as per the latest reports. This new merger will definitely create quite a stir in the Indian banking sector.