The Cabinet Committee on Economic Affairs (CCEA) has approved the first ever three-way merger of the country. The three banks are Dena Bank, Vijaya Bank and Bank of Baroda. The largest public sector lending is State Bank of India and the ICICI Bank is largest private sector lending. The resulting merged entity will thus become the third largest bank in the country. According to the scheme of amalgamation, the business of Vijaya Bank and Dena Bank will be transferred to the Bank of Baroda thus the other two public sector banks will be transferors and Bank of Baroda will be transferee.
Ravi Shankar Prasad, Union Minister, confirmed that there will be no impact on the service conditions of the employees and there will be no retrenchment after the merger. The board of Bank of Baroda will ensure that the interests of all transferring employees and officers of the transferor bank are protected. The permanent and regular officials of transferor banks will be transferred to the merged entity. The government has last year introduced its plan to merge the three banks as part of efforts to tackle a pile of bad loans plaguing the banking sector but the government approved the amalgamation plan came after strike of two days by nearly 10 lakh bank officials to protest against the proposed merger and press for immediate settlement of wage negotiations.
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