All branches of public sector lenders Vijaya Bank and Dena Bank will function as branches of Bank of Baroda from April 1, 2019, the Reserve bank of India said on Saturday.
State-owned Bank of Baroda's proposed merger with Dena and Vijaya Bank will be affected from April 1.
"Consequently, all branches of Vijaya Bank and Dena Bank will function as branches of Bank of Baroda from April 1, 2019. Customers, including depositors of Vijaya Bank and Dena Bank will be treated as customers of Bank of Baroda with effect from April 1, 2019," the Reserve Bank of India said in a press release.
As per the merger plan, shareholders of Vijaya Bank will get 402 equity shares of BoB for every 1,000 shares held. Similarly, the shareholders of Dena Bank will receive 110 equity shares of BoB for every 1,000 equity shares held.
After the commencement of the amalgamation scheme, the boards of Vijaya Bank and Dena Bank will stand dissolved. The entire share capital of Vijaya Bank and Dena Bank will stand cancelled and the shares of both these banks will also stand delisted from stock exchanges.
Earlier on March 28, the government announced to infuse Rs 5,042 crore into state-owned Bank of Baroda (BoB) ahead of merger.
Last month, the Cabinet had approved the merger of Vijaya Bank, Dena Bank with Bank of Baroda. Following the merger of these state-owned banks, BoB will become the third largest bank in India after the State Bank of India and HDFC Bank in terms of assets.
In September last year, the government had announced the merger of these three banks, as part of its strategy to promote consolidation in the sector marred by loads of non-performing assets (NPAs). However, this is the first three-way merger in the public sector banking space has taken place. Before this, the State Bank of India had merged five of its subsidiary banks with itself and took over Bharatiya Mahila Bank, which secured it a place among the top 50 global lenders.
Edited by Chitranjan Kumar