The government has announced that Bank Of Baroda, Vijaya Bank and Dena Bank will be merged into a single bank which will become India's third largest bank. Rajeev Kumar,
Secretary Department of Financial Services, said in a press conference
today that employees interest would be protected in the merger process.
The merger of five SBI associate banks was done without any job
losses, he said. The three banks will continue to work independently
till the merger.
Kumar said the merger would help improve operational efficiency and
customer services. He said it was time for the next generation of
strategic banking reforms.
The government had initiated numerous reforms over the last four
years, especially with respect to banking and to ensure clean lending
process, he said.
He said the stock of non-performing assets (NPAs) had reduced by Rs
21,000 crore in last quarter. Banks recovered Rs 36,551 crore in the
first quarter of FY19. There was a need to increase scale and synergy
for growth momentum to continue, he said.
Kumar talked about various steps the government had taken to clean
banking including the Insolvency and Bankruptcy Code (IBC). He said now
people knew that if they had taken loan, they would have to return it.
He said the IBC was fundamentally changing the creditor-debtor
relationship in India. He said all loans over Rs 150 crore would be
monitored by a separate vertical in each bank.
"The government is keen to take steps so that history isn't repeated as
far as NPAs are concerned. The government approach is to make the
banking sector’s fundamentals strong," he said.
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