Dena Bank, Vijaya Bank, Bank of Baroda merger will help improve quality of corporate governance for banks: Report
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Alka Anbarasu, Vice President, Financial Institutions Group, Moody’s Investors Service reacted to the merger of Dena Bank, Vijaya Bank and Bank of Baroda stating that the merged entity will have a market share of about 6.8% by loans, news agency ANI reported.
According to reports, the banking entity will be credit positive as "it'll provide efficiencies of scale and help improve quality of corporate governance for the banks," Anbarasu told media on Tuesday.
The government on Monday announced the merger of Dena Bank, Vijaya Bank, and Bank of Baroda as part of the effort to revive credit and economic growth.
The merged entity will have a market share of about 6.8% by loans – according to data as of March 2018 -- making it the third largest bank in the system: Alka Anbarasu, Vice President, Financial Institutions Group, Moody’s Investors Service
— ANI (@ANI) September 18, 2018
The new entity is expected to be the country's third-largest lender.
While announcing the merger, Finance Minister Arun Jaitley on Monday said the amalgamation would make the banks stronger, more sustainable, and increase their lending ability.
Jaitley added that banks' lending was becoming weak, and hurting corporate-sector investments. He added that many banks were in fragile condition due to excessive lending and ballooning non-performing assets (NPAs).
"This amalgamated entity will increase banking operations," Jaitley stated.