New Delhi, January 2: The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the first-ever three-way amalgamation of public sector banks, allowing the Vijaya Bank and Dena Bank to merge into the Bank of Baroda (BoB). With this merger, BoB will emerge as India's second largest state lender, after the SBI.

No jobs would be lossed in the merger, confirmed Union Law Minister Ravi Shankar Prasad, adding that the service condition of employees would remain the same. The intent of the merger was to turn BoB into a "globally competitive lender", he said. Bank Unions Had Protested Against 3-Way Merger on Dec 26.

"The amalgamation will help create a strong globally competitive bank with economies of scale and enable realisation of wide-ranging synergies," said the press release issued by the government.

"Leveraging of networks, low-cost deposits and subsidiaries of the three banks has the potential of yielding significant synergies for positioning the consolidated entity for substantial rise in customer base, market reach, operational efficiency, wider bouquet of products and services, and improved access for customers," it further added.

The merger will come into effect from January 4, 2019. The equity-share exchange ratio was announced by BoB earlier in the day. As per the pact, Vijaya Bank shareholders will receive 402 shares for every 1000 shares of BoB. Dena Bank shareholders would receive 110 for every 1,000 shares of Bank of Baroda.

(The above story first appeared on LatestLY on Jan 02, 2019 06:19 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).