NEW DELHI: As the government on Monday proposed amalgamation of Bank of Baroda (BoB), Vijaya Bank and Dena Bank into the country’s third-largest bank, BoB Managing Director P.S. Jayakumar said it may happen in four to six months.
“Going by past practices, the merger may take four to six months. It can be speeded up also...it depends,” Jayakumar told reporters after Finance Minister Arun Jaitley and Financial Services Secretary Rajeev Kumar announced the proposal.
The envisaged amalgamation will be the first-ever three-way consolidation of banks in India, with a combined business of Rs 14.82 lakh crore. The combined entity will have a net NPA ratio at 5.71 percent, better than public sector banks (PSB)’s average of 12.13 percent. The boards of the three state-run banks are expected to meet shortly and consider the government’s proposal and decide the merger ratio and other details of the scheme of amalgamation. The government’s shareholding will be as per the merger ratio.
“It is in tune with the sixth largest economy in the world. You need a global reach. Both Dena Bank and Vijaya Bank will get that global reach through BoB and BoB will get a much sounder credit culture in the Vijaya Bank. It’s futuristic where you have large global banks,” Kumar said. BoB MD and CEO Jayakumar said while it will benefit loss-making Dena Bank, BoB will be benefited by its stronger presence in Maharashtra and Gujarat, and by having more branches in under-represented four southern states. “BoB brings a huge foreign currency position to the table, technology is there and there are the lot of things we are doing in the transformation journey which will be valuable to them (Vijaya Bank and Dena Bank),” he said. (IANS)