The central government on Monday announced that three state-run banks, namely the Bank of Baroda, Vijaya Bank and Dena Bank will be merged to create the third largest bank in the country.
The employees’ interest of each bank will be protected during the merging process, said Financial Services Secretary Rajiv Kumar at a press conference alongside Finance Minister Arun Jaitley. He cited examples of a similar step earlier, where five associate SBI banks and the Bharatiya Mahila Bank were merged as part of the State Bank of India (SBI) without any job loss.
Kumar also added that the merger would help improve operational efficiency and customer services. He said it was time for the next generation of strategic banking reforms.
According to a report in NDTV, Kumar informed that the proposal will be sent to the boards of the three banks, who will have to approve it first before any other process can be initiated.
It is an initiative by the government to reduce the lending process and also overcome the continuous growth of the non-performing assets.
Meanwhile, Finance Minister Arun Jaitley said, reports the website, that the government had announced in the budget that consolidation of banks was also in our agenda and the first step has been announced.
“No employee will face any service conditions which are adverse in nature. The best of the service conditions will apply to all of them,” he added.
The three largest state-run banks of India currently are State Bank of India, and private sector peers HDFC Bank and ICICI Bank.
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