The Union Cabinet on Wednesday approved the first-ever three-way merger in the history of Indian banking with an amalgamation of state-owned Vijaya Bank, Dena Bank and Bank of Baroda (BoB).
According to the Union Minister Ravi Shankar Prasad, the merger will make BoB the third largest bank in the country and a "globally competitive entity".
The minister said there will be no retrenchment of employees as the employees of Dena and Vijaya banks will be transferred to BoB.
As per the Scheme of Amalgamation, 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.
The government in September last year had announced merger of state-owned Vijaya Bank and Dena Bank, with larger peer Bank of Baroda, aiming to create the third largest lender after SBI and ICICI Bank.
Scrip of Bank of Baroda closed at Rs 119.40, down 3.16 per cent on the BSE.
Vijaya Bank shares closed almost flat at Rs 51.05 apiece on BSE while that of Dena Bank at Rs 17.95.
(With PTI inputs)