Mumbai: Bank of Baroda on Monday became India’s second largest public sector bank behind State Bank of India (SBI) following a three-way merger with Dena Bank and Vijaya Bank. The combined bank will have a geographical reach of more than 9,500 branches, more than 13,400 ATMs with 85,000 employees serving 12 crore customers. Punjab National Bank was so far the second largest government-owned bank.
The Reserve Bank of India said branches of Dena Bank and Vijaya Bank will function as Bank of Baroda outlets after the amalgamation on April 1. Dena Bank and Vijaya Bank will help Bank of Baroda increase its reach in the western, southern and northeastern regions. However, some branches will be shut to eliminate overlapping and achieve economies of scale.
The merger is also expected to improve customer base, operational efficiency and capability to offer a wider bouquet of products and services for customers. “Bank of Baroda is in process of filing listing applications with stock exchanges and the equity shares will either be credited to demat accounts or share certificates will be dispatched to the eligible shareholders of Vijay Bank and Dena Bank,” it said in a communication to the exchanges.
“Further, in terms of the aforesaid scheme, bank accounts of eligible shareholders of Vijaya Bank and Dena Bank as registered with the depositories or bank will be either credited or fractional cash warrants will be issued with amount arising out of fractional entitlements,” the bank added. The number of public sector banks has now reduced to 19 from 21.