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Bank Employee's Association oppose merger of Bank of Baroda, Vijaya Bank and Dena Bank

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Bengaluru, Sep 19: All India Bank Employee's Association of India (AIBEA) has opposed the Centre's move to merge Bank of Baroda, Vijaya Bank and Dena Bank with a combined business of Rs. 14.82 lakh crore, making it India's third Largest Bank.

Bank Employees Association oppose merger of Bank of Baroda, Vijaya Bank and Dena Bank

The Finance Ministry stated that the consolidation will help create a strong globally competitive bank with economies of scale and enable realization of wide-ranging synergies. Leveraging of networks, low-cost deposits and subsidiaries of the three banks have the potential of yielding significant synergies for positioning the consolidated entity for substantial rise in customer base, market reach, operational efficiency, a wider bouquet of products and services, and improved access for customers.

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Finance Minister Arun Jaitley assured that the amalgamation will increase the banking operations and no employee will face any service condition adverse to present conditions.

However, AIBEA opposed the move and demanded review and re-examination of the decision.

The association claimed that there is no evidence that the merger of banks would strengthen the banks and or make it more efficient. Citing the example of the merger of SBI and associate banks, the association claimed the no miracle has happened after the merger. But, it resulted in the closure of branches, reduction of staff, increase in bad loans.

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Increase in bad loans:
Year GROSS NPA
31/3/2014 2,29,278 crore
31/3/2015 2,80,481 crore
31/3/2016 5,41,972 crore
31/3/2017 6,86,750 crore
31/3/2018 8,95,600 crore
Courtesy: Data provided by AIBEA

According to the association, the SBI has gone into loss for the first time in 200 years after the merger. Total bad loans of five SBI associate banks as on 31/3/2017 was around Rs 65,000 Crore and that of SBI at RS 1,12,000 Crore, that id total of Rs. 1,77,000 Crore. Now, in 2018, the total bad loans of ABI has increased to Rs. 2,25,000 Crore.

The merger of these three banks is nothing but camouflaging the crisis of bad loans staring at the banking sector. The merger will not help the recovery of bad loans of these three banks, that is Rs 85,000 Crore.

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