The government has decided to infuse Rs 5,042 crore into state-owned Bank of Baroda (BoB) ahead of merger of two other public sector lenders Dena Bank and Vijaya Bank with BoB.

The finance ministry through its notification on Wednesday conveyed its decision to infuse capital of Rs 5,042 crore in BoB, the bank said in a regulatory filing.

"The capital infusion will be by way of preferential allotment of equity shares (special securities/bonds) of the bank during FY2018-19, as government's investment," it said.

According to the Scheme of Amalgamation, shareholders of Vijaya Bank will get 402 equity shares of BoB for every 1,000 shares held.

In the case of Dena Bank, its shareholders will get 110 shares for every 1,000 shares of BoB.

The government in September last year had announced merger of Vijaya Bank and Dena Bank with Bank of Baroda, aiming to create the third-largest lender after SBI and ICICI Bank.