A merger of Vijaya Bank, Dena Bank and Bank of Baroda would lead to business of Rs 14.8 lakh croreDena Bank said on Monday that its board of directors approved the merger of the state-run bank with peers Bank of Baroda and Vijaya Bank.
The development came a week after the government proposed a plan to merge the three PSU banks, to create the country's third largest lender.
Dena Bank said, in a regulatory filing on Monday, that its board met on the same day and approved the merger plan.
The decision, it noted, was "in line with Department of Financial Services, Ministry of Finance, Government of India proposal dated 17th September, 2018".The combined business - after merger of the three PSU banks -would be the second largest state-run bank of the country, Dena Bank further said.Here are five things to know about the big bank merger:1.
A merger of Vijaya Bank, Dena Bank and Bank of Baroda would create acombined business of Rs 14,82,422 crore.
This takes into account business worth Rs1,72,937 crore of Dena Bank, Rs 10,29,811 crore of Bank of Baroda and Rs2,79,674 crore of Vijaya Bank.2.
The government had on September 17 announced the merger plan, as part of efforts to tackle lakhs of crores of bad loans plaguing the sector and revive credit growth.3.
At present, state-run State Bank of India, and private sector peers HDFC Bank and ICICI Bank are the three largest lenders in the country.4.
The net NPA (non-performing asset) ratio of the merged entity will stand at 5.71 per cent, as against the PSU bank average of 12.13 per cent, the government had said in its official statement dated September 17.5.
The government owns majority stakes in 21 banks that account for more than two-thirds of the banking assets in the country.(With agency inputs)