MERGER OF DENA BANK, VIJAYA BANK AND BOB

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INTRODUCTION

State-owned Bank of Baroda's proposed merger with Dena and Vijaya Bank will be affected from
April 1. The government's amalgamation plan for these state-owned banks has already got all the
necessary approvals from the regulators concerned. The Bank of Baroda board in a recent meeting
also decided to issue and allot equity shares to Vijaya Bank and Dena Bank on March 11.
The scheme has been named as 'Amalgamation of Vijaya Bank and Dena Bank with Bank of
Baroda', BoB said in a statement to the stock exchange. "... (The bank) fixed Monday, 11th March
2019, as Record Date for issuing and allotting equity shares of the Bank of Baroda to the
Shareholders of Vijaya Bank and Dena Bank as per aforementioned Share Exchange Ratio," said
the statement.
"It (amalgamation) shall come into force on the 1st day of April, 2019," it said. As per the Scheme
of Amalgamation, shareholders of Vijaya Bank will get 402 equity shares of BoB for every 1,000
shares held. Similarly, the shareholders of Dena Bank will receive 110 equity shares of BoB for
every 1,000 equity shares held.
As per the approved plan, after the commencement of the amalgamation scheme, the boards of
Vijaya Bank and Dena Bank will stand dissolved. "Any whole-time director, including the
managing director, of the Vijaya Bank and Dena Bank, shall cease to hold office and shall be
entitled to receive salary and allowances in lieu of the notice in accordance with the applicable
law," the BoB statement said. The entire share capital of Vijaya Bank and Dena Bank, without any
further act, deed or instrument, will stand cancelled, it said, adding that the shares of both these
banks will also stand delisted from stock exchanges.
The government in September 2018 announced the merger of state-owned Vijaya Bank and Dena
Bank with larger PSB Bank of Baroda to create the third largest lender after SBI and ICICI Bank
in the country. The merger plan got the Union Cabinet nod in January. It was part of the
government's strategy to promote consolidation in the sector marred by loads of non-performing
assets (NPAs). However, this is the first three-way merger in the public sector banking space.
 Before this, the State Bank of India had merged five of its subsidiary banks with itself and took
over Bharatiya Mahila Bank, which secured it a place among the top 50 global lenders.
The merger will allow the combined entity under BoB more lending power, giving it a global
competitive identity. As per the approved plan, there will be no effect on employees' services and
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working conditions and no retrenchment will be done.

PROBLEM STATEMENT

The approval for merger of these three banks comes days after nine bank unions, with close to 1
million employees, held a nation-wide bank strike against the decision. Meanwhile, BoB also
finalised a share swap ratio for the merger of Vijaya Bank and Dena Bank with itself on
Wednesday. As per the Scheme of Amalgamation, the 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.

OBJECTIVES OF THE STUDY

 To study the merger of Dena bank, Vijaya Bank and BoB.

 To take the respondents view regarding Dena bank, Vijaya Bank and BoB.
 To understand the importance of mergers of banks in India.
 To understand the challenges in merger of Dena bank, Vijaya Bank and BoB.

SCOPE OF THE STUDY

 Scope of the Study is to understand the merger of Dena bank, Vijaya Bank and BoB
 To contribute to the growth of the organization.
 There is no such research work was carried before.

COMPANY PROFILE

Dena Bank Ltd was an Indian public sector bank. It was headquartered in Mumbai and had 1,874
branches. The bank was founded in 1938 and the Indian government nationalized it in 1969.
 On 17 September 2018, the Government of India proposed the amalgamation of Dena Bank
and Vijaya Bank with the Bank of Baroda, pending approval from the boards of the three
banks. The Union Cabinet and the boards of the banks approved the merger on 2 January 2019.
Under the terms of the amalgamation, Dena Bank and Vijaya Bank shareholders received 110 and
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402 equity shares of the Bank of Baroda, respectively, of face value ₹2 for every 1,000 shares they
held. The amalgamation became effective from 1 April 2019.

Vijaya Bank today is a PAN India Institution, serving diverse sectors of the society. The bank has
built a network of 2031 branches, 13 Extension Counters and 2001 ATMs as on 31.03.2017 that
span across all States and Union Territories in the country.
Vijaya Bank offers a bouquet of innovative and attractive products and services to the customers.
Vijaya Bank also incorporated the latest technology to provide the best services to our customers.
The Bank offers several technology products, such as, ATMs, Cash Deposit Machines, Debit and
Credit cards, internet banking, Mobile Banking, Tab Banking, e-Passbook, Mobile Wallet, Funds
transfer through RTGS and NEFT etc. All Branches / offices are under RTGS / NEFT. The Bank
also offers RuPay cards to its customers.

The driving force behind Vijaya Bank's every initiative has been its 15000+ strong dedicated
workforce.

Vijaya Bank was a public sector bank with its corporate office in Bengaluru, Karnataka, India. It
was one of the nationalised banks in India. The bank offered a wide range of financial products
and services to customers through its various delivery channels. The bank had a network of 2031
branches (as of March 2017) throughout the country and over 4000 customer touch points
including 2001 ATMs.

On 17 September 2018, the Government of India proposed the merger of Vijaya Bank and Dena
Bank with the Bank of Baroda, pending approval from the boards of the three banks. The merger
was approved by the Union Cabinet and the boards of the banks on 2 January 2019. Under the
terms of the merger, Dena Bank and Vijaya Bank shareholders received 110 and 402 equity shares
of the Bank of Baroda, respectively, of face value ₹2 for every 1,000 shares they held. The merger
is effective from 1 April 2019
 Bank of Baroda (BoB) is an Indian multinational, public sector banking and financial
services company. It is owned by Government of India and headquartered in Vadodara, Gujarat.
It has a corporate office in Mumbai, Maharashtra.

Page | 4 Based on 2017 data, it is ranked 1145 on Forbes Global 2000 list. BoB has total assets in excess
of ₹ 3.58 trillion (making it India’s 2nd biggest bank by assets), a network of 9583 branches in
India and abroad, and 10441 ATMs as of July, 2017. The government of India announced the
merger of Bank of Baroda, Vijaya Bank and Dena Bank on September 17, 2018 to create the
country's third largest lender. The amalgamation is the first-ever three-way consolidation of banks
in the country, with a combined business of Rs 14.82 lakh crore, making it the third largest bank
after State Bank of India (SBI) and HDFC Bank.

The bank was founded by the Maharaja of Baroda, Maharaja Sayajirao Gaekwad III on 20 July
1908 in the Princely State of Baroda, in Gujarat. The bank, along with 13 other major commercial
banks of India, was nationalised on 19 July 1969, by the Government of India and has been
designated as a profit-making public sector undertaking(PSU).

As many as 10 banks have been merged with Bank of Baroda during its journey so far

RESEARCH METHODOLOGY

Research methodology stands for the ways & means that we adopt for conducting research. In this
we study the various steps that are generally adopted by a researcher in pursuing the research

Research methodology consist of enunciating the problem, formulating the hypothesis, collecting
the facts of data, analyzing the fact and reaching certain conclusion either in the form of solutions
towards the concerned problem or in the form of certain generalizations for some theoretical
formulation.

“All progress is born of enquiry. Dealt is often better than overconfidence for it leads to inquiry,
& inquiry leads to invention.”

“All progress is born of enquiry. Dealt is often better than overconfidence for it leads to inquiry,
& inquiry leads to invention.”
 Research methodology is a way to systematically solve the problem. It may be understood has a
science of studying how research is done scientifically. In it we study the various steps that all
generally adopted by a researcher in studying his research problem along with the logic behind
them.
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The scope of research methodology is wider than that of research method.

Research is defined as “a scientific & systematic search for pertinent information on a specific
topic”. Research is an art of scientific investigation. Research is a systemized effort to gain new
knowledge. It is a careful inquiry especially through search for new facts in any branch of
knowledge. The search for knowledge through objective and systematic method of finding solution
to a problem is a research.

RESEARCH DESIGN

A research is the arrangement of the conditions for the collections and analysis of the data in a
manner that aims to combine relevance to the research purpose with economy in procedure. In
fact, the research is design is the conceptual structure within which research is conducted; it
constitutes the blue print of the collection, measurement and analysis of the data. As search the
design includes an outline of what the researcher will do from writing the hypothesis and its
operational implication to the final analysis of data.

The design is such studies must be rigid and not flexible and most focus attention on the following;

The present study is exploratory in nature, as it seeks to discover ideas and insight to brig out new
relationship. Research design is flexible enough to provide opportunity for considering different
aspects of problem under study. It helps in bringing into focus some inherent weakness in
enterprise regarding which in depth study can be conducted by management.

The research design used in this project by the researcher is the descriptive research design.

Descriptive research design

 It is well structured.
 It is more economical, we can gather more information.
 Problems can be found after the questionnaire preparation.
  It needs less time.
Data Collection

For any study there must be data for analysis purpose. Without data there is no means of study.
Page | 6 Data collection plays an important role in any study. It can be collected from various sources. I

have collected the data from two sources which are given below:

Primary data : A survey will be conducted to gather primary data from the market here the main
emphasis will be given on the supply chain practices followed by different companies. It will help
us to know the general practices being followed in the market. The executives of the company will
be interview for knowing the better insight of the company.

Data observed or collected directly from first-hand experience. Data, or facts, may be derived from
several sources. Data can be classified as primary data and secondary data. Primary data is data
gathered for the first time by the researcher; secondary data is data taken by the researcher from
secondary sources, internal or external. The researcher must thoroughly search secondary data
sources before commissioning any efforts for collecting primary data. There are many advantages
in searching for and analyzing data before attempting the collection of primary data. In some cases,
the secondary data itself may be sufficient to solve the problem. Usually the cost of gathering
secondary data is much lower than the cost of organizing primary data. Moreover, secondary data
has several supplementary uses. It also helps to plan the collection of primary data, in case, it
becomes necessary. We shall therefore discuss secondary data first and then take up primary data.

 Talking with the employees of the department.

 Discussion with the head of the department.

Secondary data collection methods

Published data and the data collected in the past or other parties is called secondary data

 Companies and other websites

 Reports /Articles/Blogs
 magazines/journals News papers/business magazine
 Published Sources such as Journals, Government Reports, Newspapers and
o Magazines etc.
  Unpublished Sources such as Company Internal reports prepare by them given to their
analyst & trainees for investigation.
Websites and some official site, some other sites are also searched to find data

Page | 7 Research Plan: Research Plan is no specific for all types of research; it is decided depending upon

the nature of the problem

Designing a research plan calls for decisions on –

1. Data sources

2. Research Instruments

3. Sampling plan

4. Contact methods.

Limitations:

 Time pressure and fatigue on the part of respondents and interviewer.

 Respondent’s inability to formulate a response.

Tool used:

The researcher carries out analysis through various statistical tools. The statistical analysis is useful
for drawing inference from the collected information. While making the project file various tools
will be used.

These are:-

 Frequency Table

 Microsoft Excel

 Microsoft Word

 Various analysis tools like Bar Graphs, Pie Graphs, tables

Sampling procedure / Sampling method

The sampling method used for this study is non-profitability convenience sampling, which is
selected according to the easy and convenience of the researcher.
 Geographical Area: The study is conducted in India.

Research Instrument

Research instrument used for data collecting is by using questionnaire.

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Questionnaire

The questionnaire is prepared in a well-structured and non disguised form so that it is easily
understandable and answerable by everyone. The type of questions include in the questionnaire
are open-ended questions, multiple choice questions and dichotomous questions

LIMITATIONS OF THE STUDY

(1) Time pressure and fatigue on the part of respondents and interviewer.

(2) Respondent’s inability to formulate a response.

(3) Total research work is based on Primary and secondary data.

(4) During the research a significant error up to 4% will be accepted.
(5) Financial limitation causes incomplete data collection.
(6) External activities are not considered as various factors of change.

FURTHER DIRECTION OF FUTURE RESEARCH

As the three nationalised banks, Bank of Baroda, Dena Bank and Vijaya Bank merged to form the
second largest public sector bank in the country, the unified management Monday said it would
benefit customers, as well as employees in a big way.

The 120+ million customers will experience superior banking services and benefit from wider
product range including cash management solution, supply chain financing, financial planning,
wealth management.
 BIBLIOGRAPHY

 https://www.businesstoday.in/sectors/banks/vijaya-bank-dena-bank-merger-bob-
effective-april-1-share-exchange-plan/story/320823.html
Page | 9  https://www.businesstoday.in/sectors/banks/cabinet-approves-merger-of-vijaya-bank-
dena-bank-with-bank-of-baroda/story/306168.html
 https://www.moneycontrol.com/news/business/merger-of-vijaya-bank-and-dena-bank-
with-bob-to-be-effective-from-april-1-3565761.html
 https://economictimes.indiatimes.com/industry/banking/finance/banking/merger-of-
vijaya-bank-and-dena-bank-with-bob-to-be-effective-from-april-
1/articleshow/68085470.cms
 https://www.bloombergquint.com/business/government-announces-merger-of-bank-of-
baroda-dena-bank-vijaya-bank
 https://www.bankofbaroda.com/amalgamation.htm
 https://en.wikipedia.org/wiki/Dena_Bank
 https://en.wikipedia.org/wiki/Vijaya_Bank
 https://www.vijayabank.com/About-Us/Overview
 https://en.wikipedia.org/wiki/Bank_of_Baroda
 https://economictimes.indiatimes.com/industry/banking/finance/banking/vijaya-
bankdena-bank-merger-with-bob-will-benefit-customers-
employees/articleshow/68674482.cms?from=mdr