The cabinet today approved the merger of Vijaya Bank & Dena Bank with Bank of Baroda. After today’s merger, Bank of BarodaNSE 0.80 % will become the third biggest public sector bank. The merger will be effective from April 1.
This is also the first ever three-way merger in Indian banking. Addressing the media, Ravi Shankar Prasad said that all employees of Vijay Bank & Dena Bank will be transferred to Bank Of Baroda. No retrenchment will take place in the merger process.
The boards of public lenders Bank of Baroda and Dena Bank on Wednesday approved swap ratio for the proposed merger of the two PSU banks.
In a regulatory filing, Dena Bank said that its shareholders will receive 110 equity shares of Bank of Baroda of face value Rs 2 for every 1,000 shares they held.
In September last year, the ‘Alternative Mechanism’ (AM) headed by Finance Minister Arun Jaitley had decided to merge Dena Bank and Vijaya Bank with Bank of Baroda. The decision was in a bid to create a stronger and sustainable global-sized lender.
Post the completion of the merger with the two banks, Bank of Baroda is likely to be the resulting entity post-merger and will become the third-largest Indian bankNSE 0.14 %, overtaking both Punjab National BankNSE -0.13 % and ICICI BankNSE 0.56 %, in terms of assets, but remaining behind State Bank of India NSE 0.43 % and HDFC BankNSE -0.54 %, Fitch Ratings had said in a September note.
A Grievance Redressal Committee headed by Pramod Kade, retired judge of Mumbai High Court, has been set up to address the grievances of minority shareholders.
Source: Economic Times