Indian cabinet on Wednesday (2) approved the scheme of amalgamation for amalgamating Bank of Baroda, Vijaya Bank, and Dena Bank, with Bank of Baroda as the transferee bank and Vijaya Bank and Dena Bank as transferor banks.
The amalgamation will be the first-ever three-way consolidation of banks in India, with the amalgamated bank being India's second largest public sector bank.
The scheme will come into force on April 1, 2019.
The transferee bank shall issue shares to the shareholders of transferor banks as per share exchange ratio. Shareholders of the transferee bank and transferor banks shall be entitled to raise their grievances, if any, in relation to the share exchange ratio, through an expert committee.
The amalgamated banks will have access to a wider talent pool, and a large database that may be leveraged through analytics for competitive advantage in a rapidly digitalising banking context. Benefits would also flow as a result of wider reach and distribution network and reduction in distribution costs for the products and services through subsidiaries.
The amalgamation will help create a strong globally competitive bank with economies of scale and enable the realisation of wide-ranging synergies.
Meanwhile, the board of directors of the Bank of Baroda approved the swap ratio for the amalgamation. Accordingly, Vijaya Bank shareholders will get 402 shares of Bank of Baroda for 1,000 shares held of Vijaya Bank. Dena Bank shareholders will obtain 110 shares of Bank of Baroda for every 1,000 shares.
Rahul Bhatt sparks controversy over 'insensitive' remarks about sisters Alia and Pooja Bhatt