Vijay Bank-Dena Bank Merger With Bank of Baroda Gets Govt’s Approval
The Union Cabinet approved the merger of Vijaya Bank and Dena Bank with Bank of Baroda. The Cabinet meeting chaired by Prime Minister Narendra Modi also approved the amendments in Trade Union Act, 1926 to make provisions for recognition of trade unions. The Cabinet Committee on Economic Affairs (CCEA) decided to provide 3 per cent interest subsidy to merchant exporters, entailing an expenditure of Rs 600 crore.
With the merger of Vijaya Bank and Dena Bank, the Bank of Baroda (BoB) will become the third largest bank after State Bank of India and ICICI Bank. “There will be no impact on the service conditions of the employees and there will be no retrenchment following the merger,” Union Law Minister Ravi Shankar Prasad told reporters about decisions taken by the Union Cabinet.
The merger has been designed to make BoB as merged entity, a globally competitive lender, Prasad added.
The Cabinet also approved amendment to the Trade Unions Act, 1926 to make provisions regarding recognition of trade unions. The present act provides for only registration of trade unions. Currently, there is no provision for recognition of unions in the Act, said Labour Minister Santosh Gangwar.
However, the recognition of trade union is governed by guidelines in the ‘Code of Discipline’ evolved in 1958, voluntarily accepted by employers and employees. The recognition is necessary because recognised trade union of an industry or establishment gets bargaining or negotiating rights with the employer.
To a query on the faction fights in the Congress’ trade union INTUC, the Minister said that “this division in the INTUC issue” will decided by the Courts.
The CCEA decided to provide 3 per cent interest subsidy to merchant exporters, entailing an expenditure of Rs 600 crore, to enhance liquidity with a view to boosting outbound shipments. “The proposal will entail benefits of around Rs 600 crore to exporters on interest equalisation for the remaining period of the scheme,” an official release said.
It added that the inclusion of merchant exporters in the scheme is expected to make exporters more competitive, encourage them to export more products manufactured by MSMEs.