The government had decided to merge three PSU banks - Bank of Baroda, Dena Bank and Vijaya Bank. Government had end the speculation of merger of banks with the second merger after merge of SBI with it's associate bank and Bharatiya Mahila Bank. The decision was taken under at a meeting of a ministerial panel called alternative mechanism headed by finance minister Arun Jaitely.
Vijaya Bank has give us hope with an improvement in April to June quarter with gross NPAs at 6.19 percent vs 6.34 percent in the January to March quarter. On the one hand, Bank of Baroda's gross NPAs grew to 12.46 percent in Q1FY19 compared to 12.26 percent in Q4FY18.
The Banks Merger Out Come
Out of the three banks, Vijay bank is small strongest after Bank of Baroda. While if you see Dena Bank, it would be a burden for new bank come out of merger. Dena bank having alots of problem including the huge NPA and is under the promt corrective action (PCA) framework of RBI. Redcution of NPA and making the strong bank with greater capital is the aim of the government but this doesn't server the purpose.
Third Largest Bank in India
Post merger Merger of Bank of Baroda Dena Bank and Vijaya Bank, the new bank will be third largest bank of India placing ICICI to fouth. The combine business of the new bank will be Rs Rs.14.82 lakh crore.
As on date the Bank of Baroda have 56,361 employees, Vijaya Bank have 15,874 and Dena Bank have 13,440 employees. So, after the proposed merger of the three banks, total employee strength will be around 85,675 the combine total of three. The total number of branches will around 9,500
Merger of two strong and one weak bank
If you see the NPA position of three banks you can clearly say this merger is among two strong and a weak banks.
| Bank | Net NPA | Capita Adequacy Ratio | |
|---|---|---|---|
| Bank of Baroda | 5.40% | 12.10% | |
| Vijaya Bank | 4.10% | 13.90% | |
| Dena Bank | 11% | 10% |
Vijaya Bank has give us hope with an improvement in April to June quarter with gross NPAs at 6.19 percent vs 6.34 percent in the January to March quarter. On the one hand, Bank of Baroda's gross NPAs grew to 12.46 percent in Q1FY19 compared to 12.26 percent in Q4FY18.
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