Govt announced merger of Bank of Baroda with two banks to form India's 3rd Largest Bank

The government has announced that Bank Of Baroda, Vijaya Bank and Dena Bank will be merged into a single bank which will become India's third largest bank. Rajeev Kumar, Secretary Department of Financial Services, said in a press conference today that employees interest would be protected in the merger process. 

The merger of five SBI associate banks was done without any job losses, he said. The three banks will continue to work independently till the merger. 

Kumar said the merger would help improve operational efficiency and customer services. He said it was time for the next generation of strategic banking reforms. 

The government had initiated numerous reforms over the last four years, especially with respect to banking and to ensure clean lending process, he said.

He said the stock of non-performing assets (NPAs) had reduced by Rs 21,000 crore in last quarter. Banks recovered Rs 36,551 crore in the first quarter of FY19. There was a need to increase scale and synergy for growth momentum to continue, he said.

Kumar talked about various steps the government had taken to clean banking including the Insolvency and Bankruptcy Code (IBC). He said now people knew that if they had taken loan, they would have to return it. He said the IBC was fundamentally changing the creditor-debtor relationship in India. He said all loans over Rs 150 crore would be monitored by a separate vertical in each bank.

"The government is keen to take steps so that history isn't repeated as far as NPAs are concerned. The government approach is to make the banking sector’s fundamentals strong," he said.