BoB-Dena Bank-Vijaya Bank merger: Here’s what will change for customers of these banks from April 1.
With the merger of Vijaya Bakk and Dena Bank with the Bank of Baroda, some things might change for the customers of the two banks.
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:
What could change
- New bank account numbers and customer IDs could be assigned to the customers.
- Customers will have to update their banking details with entities like the Income Tax Department, mutual funds, insurance companies, National Pension Scheme, etc, to incorporate the new account numbers and IFSC codes.
- Customers might have to fill new instruction forms for SIP and loan EMIs.
- New cheque books, passbooks, credit cards and debit cards might be issued.
- Some branches might be closed after consolidation. Customers of such branches are likely to be transferred to a different branch of Bank of Baroda.
What will remain unchanged
- The interest rates for personal loans, home loans, auto loan, education loan, etc are not likely to change.
- The interest paid to customers on fixed deposits or recurring deposits is expected to remain unchanged.
The Supreme Court of India has dismissed the petitions by several bank associations to stay the merger of Bank of Baroda, Dena Bank and Vijaya Bank, clearing the way for the amalgamation. Ahead of the merger, the government has decided to infuse Rs 5,042 crore into the Bank of Baroda by way of preferential allotment of equity shares of the bank during FY2018-19, as government’s investment.
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 for every 1,000 shares of BoB.
After the entity formed by the merger of BoB, Dena Bank and Vijaya Bank will be second the third biggest in the Indian banking sector, by virtue of assets and businesses.