The Central government proposed the amalgamation of State-owned Bank of Baroda, Dena Bank and Vijaya Bank to create India’s third largest bank as part of reforms in the public sector banking segment.
The proposal will now need the approval of the boards of these individual banks. The banks’ boards will shortly meet and take up the decision.
The decision was taken at a meeting of a ministerial panel headed by Union Finance Minister Arun Jaitley that oversees merger proposals of State-owned banks. Its other members are Railway Minister Piyush Goyal and Defence Minister Nirmala Sitharaman.
In this Occasion Jaitley says the merger will make the banks stronger and sustainable as well as increase their lending ability.
The merger of these three state-owned banks is a part of the government’s agenda of consolidation of public sector banks. The consolidation was proposed by the Alternative Mechanism [AM].
The Union Cabinet in August 2017 approved amalgamation of Public Sector Banks through Alternative Mechanism (AM) with an aim to facilitate consolidation among the Nationalized Banks to create strong and competitive banks.