BoB-Vijaya-Dena Bank Proposed Merger Shows Govt's Keenness for Reforms: Fitch | CORPORATE ETHOS

BoB-Vijaya-Dena Bank Proposed Merger Shows Govt’s Keenness for Reforms: Fitch

By: | September 28, 2018
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Sep 28: Bank of Baroda’s proposed merger with two mid-sized public sector banks need to be seen as the government’s keenness to go ahead with tough reforms in the banking sector. So believes Fitch Ratings, as the rating agency sought to comment on the India government’s announcement that Bank of Baroda would be merged with Dena Bank and Vijaya Bank .

It may be recalled that the Union government had proposed to merge the three public sector banking players in a bid to give shape to the third largest bank in the country. Following this, the director boards of all these three banks would converge in an effort to discuss and okay the proposed merger, said a news report.

Fitch Ratings believes that the government’s strategy towards tackling smaller weaker banks would find a way through the consolidation route. The consolidation move could be seen as a step towards helping the country’s banking system in a better position so that it could provide support to the fast growing economic scenario.

The ratings agency has been quoted by news sources as saying that the government’s announcement of a proposed merger of Bank of Baroda {BoB), Dena Bank and Vijaya Bank, underscores its commitment to deal with difficult reforms in the state-owned banking sector.

News reports also added that, post-merger of the three banks, the resulting entity might be known under the Bank of Baroda name.