BANKS CONSOLIDATION

Key points of the Scheme of amalgamation:

• Vijaya Bank and Dena Bank are transferor banks and Bank of Baroda (BoB) is transferee bank. This would mean that the merged entity would be known as the Bank of Baroda (BoB).
  
  
• The scheme shall come into force on April 1, 2019.
  
  
• 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.
  
  
• 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.
  
  

Significance:

• The amalgamation will be the first-ever three-way consolidation of banks in India, with the amalgamated bank being India's second largest Public Sector Bank.
  
  
• 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.
  
  
• The amalgamation will help create a strong globally competitive bank with economies of scale and enable realisation of wide-ranging synergies.