In a move to clean up the country’s banking system, the Union cabinet on Wednesday approved the merger of Dena Bank and Vijaya Bank with Bank of Baroda. The merger is considered to bring a big boost to the banking space and economy.
“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 said.
The amalgamation of the three banks is the 2nd largest lender after the State Bank of India and ICICI Bank. On April 1, 2017 the government had merged five associate banks and Bharatiya Mahila Bank with SBI in to catapult the country’s largest lender to among the top 50 banks in the world.
BoB also finalised the share swap ratio for merger of Vijaya Bank and Dena Bank with itself. As per the Scheme of Amalgamation, shareholders of Vijaya Bank will get 402 equity shares of BoB for every 1,000 shares held. In case of Dena Bank, its shareholders will get 110 shares for every 1,000 shares of BoB.
However, shares of Bank of Baroda fell 3.16% to ?119.40 apiece on the BSE before the announcement. Vijaya Bank and Dena Bank closed flat at ?51.50 and ?17.95, respectively.