State-owned Bank of Baroda's proposed merger with Dena and Vijaya Bank will be affected from April 1. The government's amalgamation plan for these state-owned banks has already got all the necessary approvals from the regulators concerned. The Bank of Baroda board in a recent meeting also decided to issue and allot equity shares to Vijaya Bank and Dena Bank on March 11.
The scheme has been named as 'Amalgamation of Vijaya Bank and Dena Bank with Bank of Baroda', BoB said in a statement to the stock exchange. "... (The bank) fixed Monday, 11th March 2019, as Record Date for issuing and allotting equity shares of the Bank of Baroda to the Shareholders of Vijaya Bank and Dena Bank as per aforementioned Share Exchange Ratio," said the statement.
"It (amalgamation) shall come into force on the 1st day of April, 2019," it said. As per the Scheme of Amalgamation, 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.
As per the approved plan, after the commencement of the amalgamation scheme, the boards of Vijaya Bank and Dena Bank will stand dissolved. "Any whole-time director, including the managing director, of the Vijaya Bank and Dena Bank, shall cease to hold office and shall be entitled to receive salary and allowances in lieu of the notice in accordance with the applicable law," the BoB statement said. The entire share capital of Vijaya Bank and Dena Bank, without any further act, deed or instrument, will stand cancelled, it said, adding that the shares of both these banks will also stand delisted from stock exchanges.
The government in September 2018 announced the merger of state-owned Vijaya Bank and Dena Bank with larger PSB Bank of Baroda to create the third largest lender after SBI and ICICI Bank in the country. The merger plan got the Union Cabinet nod in January. It was part of the government's 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. 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.
The merger will allow the combined entity under BoB more lending power, giving it a global competitive identity. As per the approved plan, there will be no effect on employees' services and working conditions and no retrenchment will be done.
Edited by Manoj Sharma
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today