New Delhi: The Indian government on Monday announced the merger of three public sector lenders — Bank of Baroda, Dena Bank and Vijaya Bank. The announcement was made after a meeting of the ‘alternative mechanism’ set up last year to consider consolidation in the banking sector. The proposal will now need to be passed by the boards of individual banks.
The merger of these three lenders follows the merger of State Bank of India and its associate banks in 2017. That experience, according to Rajiv Kumar, secretary in the Department of Financial Services, has yielded good results. This prompted the government to take the next step in consolidation by deciding to merge three public sector lenders.
The merger of Bank of Baroda, Vijaya Bank and Dena Bank will create a lender which will be the third largest in India, said Kumar.