NEW DELHI: The managing director and CEO of Dena Bank, Karnam Sekar, is likely to join Indian Overseas Bank, as the government has set March 31 as the last date for the closure of the merger of Bank of Baroda, Vijaya Bank and Dena Bank.
“The merger of Bank of Baroda, Vijaya Bank and Dena is in the final stage. The deadline to complete all the strategic arrangement is March 31, so that the entity comes into effect by April 1,” a senior official from the DFS told TNIE.
The official added that the biggest challenge for the government was to find suitable jobs for the two bank heads. While P S Jayakumar, chairman and managing director, Bank of Baroda, who got an year’s extension, is set to head the merged entity, the heads of the other two banks will be shifted to others banks.
“The consideration is undergoing to shift managing director and CEO of Dena Bank, Karnam Sekar, to Indian Overseas Bank. Also, as per the initial proposal, RA Sankara Narayanan, MD and CEO of Vijaya Bank, is the front runner for the job as chief of Canara Bank,” the official added.
The official said an announcement in this regard was likely by next week. On March 1, the government appointed former finance secretary Hasmukh Adhia as part-time non-executive chairman and non-official director of Bank of Baroda. The Appointments Committee of the Cabinet said that it had approved the proposal by the Department of Financial Services and that Adhia’s appointment would be for a period of three years, mainly to oversee the smooth transition of management in the merged entity.
In September 2018, the Centre announced this merger to promote consolidation in the sector due to huge non-performing assets. In January, the Cabinet approved the scheme to merge state-owned Dena Bank and Vijaya Bank into Bank of Baroda with effect from Apr 1, 2019.
The merger is expected to make Bank of Baroda the third largest bank in the country, with a loan book of over Rs 6.4 lakh crore, a deposit base of over Rs 8.4 lakh crore, and a combined business of Rs 14.82 lakh crore.
“The government is also planning to infuse another Rs 5,000 crore in Bank of Baroda ahead of the merger of Vijaya Bank and Dena Bank into it to even out any carry over NPAs, and for the smooth transition”, if required, another finance ministry official said.
Merger to create a behemoth
The merger is expected to make Bank of Baroda the third largest bank in the country, with a loan book of over I6.4 lakh crore, a deposit base of over I8.4 lakh crore, and a combined business of I14.82 lakh crore. In September 2018, the Centre announced this merger to promote consolidation in the sector due to huge non-performing assets.