Vijaya Bank has given its approval for the proposed merger with Dena Bank and Bank of Baroda. If completed, it would create one of the largest lenders in India.
In a regulatory statement, the bank announced that its board of directors has provided its in-principle approval for the merger.
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The board also approved the commencement of the amalgamation process, subject to statutory approvals.
Commenting on the rationale of the merger, the bank statement added: “Amalgamation would enable creation of a bank with business scale comparable to global banks and capable of competing effectively in India and globally.”
What comes after the merger?
Goals are to drive productivity, reduce operating costs and enhance efficiency of the overall banking system as a whole.
The merger also received in-principle approval from the board of Bank of Baroda last week.
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By GlobalDataLast month, the Indian government proposed the Bank of Baroda merger with Dena Bank and Vijaya Bank.
The first-ever three-way consolidation of lenders in the country aims to enhance operational synergy.
The amalgamated bank is expected to be one of the largest in the Indian market with combined business of $204bn.
With employee strength of around 85,675, the merged entity will have nearly 9,500 branches across the country.
The Bank of Baroda merger now requires approval of the Union Cabinet. The proposal also now lies in the hands of the two Houses of the Parliament.
