New Delhi, Sept 17: Three-state owned lenders - Dena Bank, Vijaya Bank and Bank of Baroda - have been merged into a single entity, said Financial Services Secretary Rajiv Kumar. The merged unit will be emerge as the third largest bank of the country, he added.

Finance Minister Arun Jaitley, who accompanied Kumar at the press conference, said the decision is part of the government's plan to strengthen the public banking sector.

"Government had announced in the budget that consolidation of banks was also in our agenda and the first step has been announced," Jaitley said.

This marks the second major merger of state-owned lenders. The last significant merger was announced in April 2017, when the SBI had taken over six smaller banks, including the State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT), besides Bharatiya Mahila Bank (BMB).

Merger of public lenders is one of the strategies deployed by the government to combat the menace of non-performing assets.

Jaitley said the government is taking steps to address the core challenge of NPA. "The previous government was attempting to hide it under the carpet. Real picture of Non Performing Assets(NPAs) was only known in 2015," he added.

(The above story first appeared on LatestLY on Sep 17, 2018 06:46 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).