The Indian government announced a proposal to merge 3 state-owned banks – Bank of Baroda, Vijaya Bank and Dena Bank – to create the country’s third largest bank. The decision was announced by Rajiv Kumar, secretary, department of financial services, at a press conference attended by finance minister Arun Jaitley too. The move is seen as part of the reforms proposed in the debt-ridden banking sector in the country. Rajiv Kumar said the decision was taken at the meeting of a ministerial panel headed by Jaitley which oversees merger proposals of state-owned banks. The other members of the panel include railways minister Piyush Goyal and defense minister Nirmala Sitharaman. Jaitley claimed this is a major decision taken by the panel and insisted that the panel did not want a want a merger of what are relatively weak banks. He added that the merger may take about a year to be fully over. He added that the government will now await the response of the banks on the proposal. Rajiv Kumar said the once the amalgamation is over, it will be the third largest bank in India and it would be a strong competitive bank with economies of scale. The entity would also be positioned for substantial rise in customer base, market reach and operational efficiency, he added.
