The Union Cabinet chaired by Prime Minister Shri Narendra Modi has 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 amalgamated bank will be better equipped in the changing environment to meet the credit needs of a growing economy, absorb shocks and capacity to raise resources. Economies of scale and wider scope would position it for improved profitability, wider product offerings, and adoption of technology and best practices across amalgamating entities for cost efficiency and improved risk management, and financial inclusion through wider reach.
- It would also enable creation of a bank with scale comparable to global banks and capable of competing effectively in India and globally.
- Strengths of individual banks - such as Dena Bank's relatively higher access to low-cost CASA deposits, Vijaya Bank's profitability and availability of capital for growth, and the extensive and global network and offerings of BoB will translate into advantages in terms of market reach, operational efficiencies and the ability to support a wider offering of product and services.
- 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.
- Public at large shall benefit in terms of enhanced access to banking services through a stronger network, the ability to support a wider offering of product and services, and easy access to credit.