All three Bob Dena & Vijaya bank send merger proposal for Govt. nod after getting approval from their respective boards. They sent the proposal to merge all the three renowned banks to the government for a final approval. The PM Modi Government has introduced this to make India third-largest lender on September.17th of this year. Now, very next step is of getting the government’s final and formal approval, followed by swap ration. However, the entire process of three banks merger is expected to take 4 to 6 months to complete all related processing. The government has proposed this concept with an aim of building a strong banking network by combining the management and resources of one weak and two strong banks. Weak and strong background of banks is mentioned on the basis of their NPA’s portfolio.
Out of all three banks, BoB and Vijaya have least NPAs portfolio in comparison to Dena Bank. Dena Banks has the highest ratio of non-performing asset i.e. 11.04% and lowest business Rs. 1.72 lakh crores (approximately). However, Bank of Baroda and Vijaya Bank have low NAPs and higher business. Where Vijaya bank is leading with a business of 2 lakh crore and 4.10% NPA portfolio, BOB has a business of 10.2 Lakh Crore and 5.4% NPA portfolio.
This is a smart move by the government to import the ongoing status of the financial sector. The merger like this has never done before, this is the first ever 3-way consolidation of banks in the country with a share swap. Before this in April 2017, State Bank Of India merged with itself 5 of its subsidiaries and took over Bharatiya Mahila Bank. Now their total combine asset is of Rs. 550 billion and is among top 50 global lenders. With all this after the merger of all 3 banks, there will be only 19 Public Sector Banks (PSU) instead of 21.
The overall zest of this hard merging seems very positive and towards productivity. If you have something to say about this then must share your reviews on it.