Merger of BoB, Vijaya & Dena banks proposed

The Centre on Monday proposed the amalgamation of state-owned Bank of Baroda, Dena Bank and Vijaya Bank to create India’s third-largest bank. The decision was taken at the meeting of a ministerial panel, headed by Finance Minister Arun Jaitley, which oversees merger proposals of state-owned banks.
The other members of the panel include Railways Minister Piyush Goyal and Defence Minister Nirmala Sitharaman. “This major decision was taken by Alternative Mechanism today to amalgamate Bank of Baroda, Dena Bank and Vijaya Bank. While making this suggestion, we have borne in mind that we don’t want a merger of what are relatively weak banks,” Mr. Jaitley said, adding, “You can have two well-performing banks absorbing a weak one in the amalgamation process and hopefully creating a mega bank which will be sustainable, whose lending ability which will be far higher.”
On the choice of banks, Mr. Jaitley said it was the government’s assessment because one of the banks [Dena Bank] had been placed under the prompt corrective action framework. “We want to save all the banks. When you make a merger, you want to make sure the merged entity is a stronger entity.” Therefore, our capacity to subsume that weaker bank into the merged entity, which will be a stronger bank, is the principal factor that weighs with the government. Of course, we see the all India expanse and so on…”
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