After the amalgamation of two erstwhile public sector banks (PSBs), Vijaya Bank and Dena Bank into Bank of Baroda (BoB), the BoB is now the second largest PSB of the country.
It now has 9,500 branches and 85,000 employees with a business mix of more than 15 lakh crore. It is reported that the BoB will protect the interest of the all employees and customers. “The consolidation offers cost and revenue synergies. The realisable revenue synergies arise from wider product offering, improved cross selling, deeper micro market penetration inter-alia on account of potential for branch relocations, improvement in fees income, etc.”- a press release of the BoB pointed out.
Historically, experience of bank mergers or amalgamations in India is mixed. In most cases, improvement wasn't much. Even the recent amalgamation of associated banks of SBI into the SBI has not been very satisfactory. A bank has to do its business in an complex environment where domestic and international economic factors influence it. Even political interference is not absent. Now private and public sector banks are doing business in a common market. Practically, these two categories do not do their jobs in the same way. Therefore, the BoB faces several challenges in the days to come.
Challenges
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