India to merge three state-owned banks

Dena Bank, Vijaya Bank and Bank of Baroda to be merged to form India's third largest bank

Dena Bank, Vijaya Bank and Bank of Baroda to be merged to form India's third largest bank

The newly merged entity would be the third largest bank of the country, said Financial Services Secretary Rajiv Kumar. "No employee will face any adverse service conditions after the amalgamation". He justified the action, stating that the government and the Reserve Bank of India (RBI) were forced to take "concrete steps" once the asset quality review of banks revealed the bad debt rot in Indian banks was far deeper than what was projected earlier.

The government had merged five associate banks and Bharatiya Mahila Bank with SBI on April 1, 2017, to catapulte the country's largest lender to among the top 50 banks in the world.

Speaking on the decision, Finance Minister Arun Jaitley said the government had announced in the budget that consolidation of banks was also in its agenda and the first step has been announced.

He said the NPA curve was now taking a turn and the time was opportune to go ahead with consolidation of banks.

Moreover, all the three banks work on the same technological platform, which eases integration and the banks will also enjoy complementary geographies as Bank of Baroda has a stronghold in the western part of India while Vijaya Bank is strong in the south. "After the government in principle makes this opinion, it suggests to the banks to consider it and we await the bank's consideration of it", he said.

Samsung investigates alleged Galaxy Note9 fire incident
He said that the engineers at Samsung are confident of its safety, and that users do not have to worry about batteries any more. Chung is now filing a lawsuit against Samsung that along with damages is seeking to ban any further sales of the Note 9.

Jaitley said that the government was making a conscious decision not to merge the operations of weak lenders. Till then, the three banks will carry on functioning independently.

Besides, Kumar said, Provision Coverage Ratio (PCR) would be better at 67.5 percent against average of 63.7 percent and cost to income ratio of the combined entity would come down to 48.94 percent as compared to average of 53.92 percent. The Bank of Baroda's bad loan ration now stands at 12.4 percent. BoB shares declined 10% to Rs 122 while Vijaya Bank's stock rose 3.3% and Dena Bank surged 20% to Rs 19.10.

The problems plaguing India's public sector banks are well known. Jaitley laid the blame on the UPA for the banking sector non-performing asset (NPA) issue.

The Minister added that this indiscriminate lending of nature "as if there was no tomorrow" took a toll on the economy, which was followed by evergreening of loans and brushing the NPAs under the carpet. "And between 2008 and 2014, there was lending of nearly Rs 55 lakh crore", he said.

Recommended News

  • Game of Thrones, Mrs. Maisel triumph at Emmys

    Game of Thrones, Mrs. Maisel triumph at Emmys

    Saturday Night Live won, as expected, for variety sketch series, taking its lifetime Emmy total to a record-setting 72 wins. SURPRISE: Alex Borstein won supporting comedy actress for her work on " The Marvelous Mrs.
    Chelsea need another step to be Premier League contenders, says Sarri

    Chelsea need another step to be Premier League contenders, says Sarri

    David Luiz has said he "loves" Chelsea boss Maurizio Sarri because he wants his players to "live life". He has won everything with the club, so it's up to him.
    Musk signs up mystery passenger to take rocket trip around moon

    Musk signs up mystery passenger to take rocket trip around moon

    Next July will mark the 50th anniversary of the first manned moon landing by Apollo 11's Neil Armstrong and Buzz Aldrin. Asked whether he'd be the first passenger, Musk - who's also the CEO of Tesla - posted an emoji of a Japanese flag.
  • Iran floats surplus oil as demand falls ahead of US Sanctions

    Iran floats surplus oil as demand falls ahead of US Sanctions

    The OPEC governor is typically the second most senior post in a country's OPEC delegation after the oil minister. At press time, Brent crude is trading at $78.35 per barrel, having clocked a low of $77.87 yesterday.
    Still uncertainty as Hurricane Florences path moves south

    Still uncertainty as Hurricane Florences path moves south

    President Donald Trump has declared states of emergency for North and SC and Virginia, which frees up the way for federal aid. Hurricane Florence is expected to start hitting the coasts of North and SC on Thursday.
    Russia and China to conduct regular war games together, minister says

    Russia and China to conduct regular war games together, minister says

    The Department of Defence said Monday that it is closely watching the ongoing drills - the largest Russian war games in decades. China was sending 3,200 troops to take part in "Vostok-2018", with many Chinese armoured vehicles and aircraft.
  • Liverpool's Defence & Other Talking Points Ahead Of Liverpool v PSG

    Liverpool's Defence & Other Talking Points Ahead Of Liverpool v PSG

    Despite PSG spending £420million on Kylian Mbappe, Edinson Cavani and Neymar , Klopp is adamant he would not swap. Belgium played an outstanding game against Brazil, but if Neymar is fit then Brazil wins it.
    Vontae Davis leaves midgame: Bills CB retires during vs. Chargers

    Vontae Davis leaves midgame: Bills CB retires during vs. Chargers

    This is not going to become a distraction for us", admitted head coach Sean McDermott , adding, "We're going to move forward. But today on the field, reality hit me fast and hard: "I shouldn't be out there anymore", the statement read.
    New Apple Watch To Detect Abnormal Heartbeats

    New Apple Watch To Detect Abnormal Heartbeats

    The Apple Watch Series 4 will feature a larger screen , more than 30% larger than previous generations, as well as a thinner body. There will also be three versions available for the smartphone: a 64GB model, a 128GB model, and a 256GB model.
  • Vikings waive Carlson after three-miss day, sign Bailey

    Vikings waive Carlson after three-miss day, sign Bailey

    After his first field goal attempt in OT sailed wide right, Minnesota went back to Carlson to kick a 35-yard would-be victor . Most recently, Blair Walsh missed a potential game-winning 27-yarder against the Seattle Seahawks in the 2016 Wild Card game.
    Typhoon Mangkhut: Deadly typhoon lands in south China

    Typhoon Mangkhut: Deadly typhoon lands in south China

    Muddy river waters swamped entire communities and the coastal city of Wilmington, North Carolina, was cut off by the flood waters. Gusts of 100 miles per hour were still lashing Hong Kong , and more than 2.5 million people had been evacuated from the region.
    Hurricane Florence: Woman, baby die after tree falls on house

    Hurricane Florence: Woman, baby die after tree falls on house

    A man who was trapped inside his New Bern, North Carolina, home by Tropical Storm Florence spoke with Fox & Friends on Saturday. More than 100 people were rescued and up to 75 more were awaiting rescue on Saturday morning, according to a town official.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.