The Modi government on Monday announced its plans to create the 3rd largest bank in India.
The bank will be created by merging the Bank of Baroda, Vijaya Bank and Dena Bank, having a combined business of Rs 14.82 lakh crore, with 10,000 branches and around 85,000 employees.
According to the Finance Minister Arun Jaitley the merger will make the banks stronger, sustainable and have increased lending ability.
“This amalgamated entity will increase banking operations,” he said.
“No employee will face any service conditions which are adverse in nature. The best of the service conditions will apply to all of them,” Jaitley added.
He slammed the UP government under whose reign the banks undertook above-normal lending during 2008-2014 as “if there was no tomorrow” resulting in huge non-performing assets to the tune of Rs 8.5 lakh crore.
“This took its toll on the economy,” he said.
The move is also expected to revive credit grow-th, which has slowed to multi-decade lows as banks struggle with bad loans.
The proposed merger follows a similar move by the government in February last year when it merged State Bank of India (SBI) with its five subsidiary banks, helping the country’s largest lender by assets increase its scale and cut expenses through synergies.
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