BoB-Dena Bank-Vijaya Bank merger: Here what will change for customers of these banks from April 1 Dena Bank, Vijaya Bank to merge with Bank of Baroda

Beating private sector lender ICICI Bank, state-run Bank of Baroda (BoB) will become India's third largest bank after its merger with Dena Bank and Vijaya Bank comes into effect tomorrow. With a total business of about 15 trillion, the merged entity will be the third-largest lender in India, after State Bank of India and HDFC Bank. This is also India's first-ever three-way consolidation of banks in India, with the amalgamated entity emerging as the country’s second largest public sector bank.

Here are 10 things to know about Bank of Baroda merger:

1. In terms of the number of branches, Bank of Baroda will rank second in India across all banks. The merged entity will have nearly 9,500 branches as Dena Bank and Vijaya Bank will help BoB increase its reach in the western, southern and north-eastern regions. However, to achieve economies of scale and remove overlapping, it is expected that some branches of either of the banks will be shut down

Branches of Vijaya Bank and Dena Bank will function as Bank of Baroda outlets from April 1, following amalgamation of the two lenders with the latter, the RBI said on Saturday. The merger of Vijaya Bank and Dena Bank with Bank of Baroda, will be effective from April 1, 2019.

“Consequently, all branches of Vijaya Bank and Dena Bank will function as branches of Bank of Baroda from April 1, 2019. Customers, including depositors of Vijaya Bank and Dena Bank will be treated as customers of Bank of Baroda with effect from April 1, 2019, ” the Reserve Bank of India said in a statement.

Earlier this week, the government decided to infuse Rs 5,042 crore in BoB to enhance capital base of the lender ahead of the merger. According to the Scheme of Amalgamation, shareholders of Vijaya Bank will get 402 equity shares of BoB for every 1,000 shares held. In the case of Dena Bank, its shareholders will get 110 shares of BoB for every 1,000 shares they held.

The government in September last year had announced merger of Vijaya Bank and Dena Bank with Bank of Baroda, aiming to create the third-largest lender after the SBI and ICICI Bank.

Two major state-run banks will stop operations from April 1. These two banks are Dena Bank and Vijaya Bank, and they will be merged with Bank of Baroda next month. Banking operations and accounts held by these two banks will be transferred to Bank of Baroda post merger. This would lead to some changes for the customers of Dena Bank and Vijaya Bank.

Since the banking operations of Dena Bank and Vijaya Bank will be handed over to Bank of Baroda (BoB), the customers may get new passbooks, cheque books, debit and credit cards, and even new account numbers and customer IDs. This means that the customers will have to get their banking details updated with entities like the Income Tax Department, mutual funds, insurance companies, etc.

Some aspects, like the interest rate on fixed deposits or recurring deposits, and existing loans, are not likely to change. Here's a look at how the merger of Dena Bank and Vijaya Bank with Bank of Baroda might affect their customers:

BoB-Dena Bank-Vijaya Bank merger: Here's what will change for customers of these banks from April 1 Dena Bank, Vijaya Bank to merge with Bank of Baroda

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