State-run Dena Bank and Vijaya Bank will cease their operations from 1 April and merge with Bank of Baroda making it the second largest public sector bank (PSB) after State Bank of India.
The government in September last year had announced the merger of Vijaya Bank and Dena Bank with Bank of Baroda (BoB), aiming to create the third-largest lender after SBI and ICICI Bank.
According to the Scheme of Amalgamation, shareholders of Vijaya Bank will get 402 equity shares of BoB for every 1,000 shares held. In the case of Dena Bank, its shareholders will get 110 shares for every 1,000 shares of BoB.
This what the merger means for the customer of Dena and Vijaya Bank:
Following the merger, operations and accounts held by Dena and Vijaya Bank will be transferred to BoB. According to Business Today, the customers of these two banks may get new passbooks, cheque books, debit and credit cards, new account numbers and customer IDs.
Following the change in the account number, the customers will subsequently have to get their details updated with the Income-Tax Department, insurance companies, etc.
The report added that the interest rate on fixed deposits or recurring deposits, and existing loan are unlikely to change for the customers of Dena and Vijaya Bank.
The brand names of the three — Bank of Baroda, Dena Bank and Vijaya Bank — are likely to be kept intact, according to Business Standard. The report added that Dena Bank and Vijaya Bank will be brought under the Bank of Baroda group and this will be written on top of the two banks’ names.
The customers of these two banks will have additional access to a larger fleet of branches and ATMs, according to News18.
Last year, Finance Minister Arun Jaitley said the merger would make the banks stronger and sustainable as well as increase their lending ability. Financial Services secretary Rajiv Kumar had said the merger would help improve operational efficiency and customer services. The three banks will continue to work independently post-merger.
The government had said that the amalgamation will help create a strong globally competitive bank with economies of scale and enable the realisation 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 a substantial rise in customer base, market reach, operational efficiency, a wider bouquet of products and services, and improved access for customers," the statement from the government said in January.
With inputs from agencies
Updated Date: Mar 29, 2019 12:00:06 IST