Cabinet approves merger of Vijaya Bank, Bank of Baroda and Dena Bank
New Delhi, Jan 2: The Cabinet Committee of Economic Affairs (CCEA) on Wednesday approved the first-ever three-way merger in Indian Banking with the amalgamation of Vijaya Bank, Dena Bank and Bank of Baroda.
This marks the first-ever three-way merger in the country's banking sector, and will create the country's second largest public sector lender.
The government said in a statement that as per the scheme of amalgamation, Bank of Baroda will be the transferee bank while the other two public sector banks will be transferor banks.
Key points of the Scheme of amalgamation:
(a) Vijaya Bank and Dena Bank are transferor banks and BoB is transferee bank.
(b) The scheme shall come into force on 1.4.2019.
(c) Upon commencement of the scheme, the undertakings of the transferor banks as a going concern shall be transferred to and shall vest in the transferee bank, including, inter alia, all business, assets, rights, titles, claims, licenses, approvals and other privileges and all property, all borrowings, liabilities and obligations.
(d) Every permanent and regular officer or employee of the transferor banks shall become an officer or employee and shall hold his office or service therein in the transferee bank such that the pay and allowance offered to the employees/officers of transferor banks shall not be less favourable as compared to what they would have drawn in the respective transferor bank.
(e)The Board of the transferee bank shall ensure that the interests of all transferring employees and officers of the transferor bank are protected.
(f) 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.