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The government declared to merge three banks it owns, namely; Bank of Baroda, Dena Bank and Vijaya Bank, in order to reduce the amount of capital needed to pump into these lenders and enable them to clean up their balance sheets.
The proposal will now need to be passed by the boards of individual banks and share swap ratios arrived at. The merged entity will be the third-largest lender in India after State Bank of India and HDFC Bank Ltd, with a total business of more than Rs. 14.82 trillion.
Finance minister Arun Jaitley said, ” In the first step of consolidation, we consolidated the subsidiaries of SBI with the parent bank to create a mega global bank. LIC, which has been keen to acquire a bank for some time, has made an offer for IDBI Bank because it suited their interests.”
“We were waiting, before moving forward, for the situation to start turning. And therefore, now the alternative mechanism has gone ahead and taken this decision today,” he further added.
PS Jayakumar, CEO, Bank of Baroda said “With the benefits of scale. A reasonable assumption is that there is a good opportunity to grow but that is something that will happen over a period of time.”
Some of the figures of the Amalgamated Bank will look like, Gross Advances Rs. 6.4 Trillion, Total Deposits Rs. 8.41 Trillion, 9,489 Branch Presence, Net NPA Rs. 5.71 Trillion, Employees 85,675.
