Merger News – Canara Bank to merge Vijaya Bank & Dena Bank
There is a possibility that Canara Bank will acquire Vijaya Bank and Dena Bank as the Government wants to create a few big Banks instead of various small banks.
According to sources, Vijaya Bank and Dena Bank will be merged first and a new entity will be formed. This new entity will be taken over by Canara Bank in next round.
Government wants three big banks of the size of State Bank of India, 2-3 specialized Banks and a few mid sized Banks.
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Canara Bank has a network of 6083 branches with a workforce of around 54000 people. Dena Bank has around 14000 employees and 1800 branches. Vijaya Bank has around 16000 employees and 2000+ branches in India.
Vijaya Bank reported a profit of Rs.204 crores for quarter ending March 2017, whereas Dena Bank has reported loss of Rs.575 crores.
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Reserve Bank of India has already invoked Prompt Corrective Action (PCA) on Dena Bank and other five public sector banks in which various restrictions are being imposed such as fresh lending, opening new branches and fresh hiring.
A Finance ministry official said that Indian Bank, Indian Overseas Bank and Syndicate Bank have also been asked to look for possible options for consolidation among themselves.
Punjab National Bank and Bank of Baroda will also be the acquiring Banks merging some other weak banks.
Finance Minister Arun Jaitley has already said that the government is actively working toward consolidation of public sector banks. He did not provide details, quoting that it is a price-sensitive information.
Various Banks have already given presentations to Finance Ministry to enable the MoF to take decision on merger of State owned lenders.