Vijaya, BoB and Dena Bank amalgamation likely by June

The amalgamation of three public sector banks- Vijaya Bank, Bank of Baroda and Dena Bank, is likely to be completed by June next year.

"It may get completed by June next year. We have a meeting on November 3 and of all the other things, the first thing that we need to discuss is Swap ratio. We need to get shareholders and regulatory approvals, including Parliament approval," R A Sankara Narayanan, MD and CEO of Vijaya Bank told DH. 

Vijaya Bank has appointed a 10-member team headed by an Executive Director to deal with the amalgamation. Vijaya Bank is hopeful that the 87-year-old bank's name will be retained while naming the new entity, he said.

"More than anything - merger or consolidation, the main issue as far as amalgamation is concerned is IT integration, and then account normalisation and HR. We are confident that it will be smooth but it will take some time. Fortunately, all three banks are in the same platform and integration will be easy," Narayanan said, adding that a bill has to be placed in Parliament.

Last month, the government had proposed the merger of three banks- Vijaya, BoB and Dena, to create the country's third largest lender, and all the three banks have received approvals from their respective boards.

When asked about the new entity's name, Narayanan said, "The new entity might have combined representation of all names or a new name will be kept in discussion with all three banks. We have requested the identity of Vijaya Bank in the combined entity." Being a predominant player in the south, Narayanan sees the amalgamation as an opportunity to reach out to more customers in the north, and that it will be beneficial for both- staff and retail customers.

"I don't see immediate merger, closure or consolidation of branches. Amalgamation will not affect any of our business growth prospects, and I am sure this will be the case with other banks also. We can better utilise the combined capital," he said.

The combined entity's total business will be over Rs 15 lakh crore. When asked about reactions from trade unions, the MD and CEO of Vijaya Bank said, "Any change will have resistance. The government is the major stakeholder and it takes decision, and we can only executive directions. I value the worries or threats of trade unions, but things will settle down over a period of time."