New Delhi: The government on Wednesday approved the merger of Dena Bank and Vijaya Bank with Bank of Baroda (BoB) to make it a globally competitive lender. With the merger, BoB will become the third largest bank after State Bank of India and ICICI Bank.

“There will be no impact on the service conditions of the employees and there will be no retrenchment following the merger," law minister Ravi Shankar Prasad told reporters about decisions taken by the Union Cabinet. The merger has been designed to make BoB as merged entity, a globally competitive lender, Prasad added.

On Wednesday, BoB also set the share swap ratio for the merger of Vijaya Bank and Dena Bank with itself. Shareholders of Vijaya Bank will get 402 equity shares of BoB for every 1,000 shares held. In case of Dena Bank, its shareholders will get 110 shares for every 1,000 shares of BoB.

On Wednesday, BoB shares fell 3.16% to 119.40 apiece on the BSE while those of Vijaya Bank and Dena Bank closed flat at 51.50 and 17.95, respectively. The benchmark Sensex ended the day 1% lower at 35,891.52 points.

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