The proposal to merge Bank of Baroda with smaller rivals Vijaya Bank and Dena Bank has been sent for government approval after securing go-ahead from the boards of the three banks, PTI reported quoting a banking official.
Bank of Baroda managing director and CEO PS Jayakumar was quoted by the news agency as saying: “The boards of all the three banks have approved (the merger proposal) and sent the recommendations to the government. We are in early stages of rolling this out.
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“The next step would be the government approving formally the merger process, and then the swap ratio.”
He added that the deal, which would be carried out through a share-swap, would take around four to six months to close. The deal was first announced last month.
The merger is the first three-way consolidation of banks in the country. It is expected to create the third largest bank in the country with a combined business of around $204bn.
It is also expected to result in wide-ranging synergies including stronger market presence and product portfolio.
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By GlobalDataMost of the state-owned banks in India are currently struggling with growing non-performing assets (NPAs) figures. The merger is one of the steps planned by the government to revitalise the sector.
If successful, the three-way merger will reduce the number of state-run lenders to 19.
