Bengaluru. All India Vijaya Bank Officers’ Association, are the majority and the only

recognized Officers’ Association in Vijaya Bank with more than 90% of officers of the

Bank being the members of this Association. We are affiliated to ALL INDIA BANK

OFFICERS’ CONFEDERATION (AIBOC), an apolitical apex organizations of Bank Officers

in India having allegiance of more than 3 lakh officers of Public and old generation

Private sector Banks and Regional Rural Banks.

The Central Govt’s decision of Merging of Vijaya Bank with Bank of Baroda along with

Dena Bank is a short sighted one and is taken without proper application of mind. We

strongly protest against this unilateral and unwarranted Merger decision of the Govt.

and demand that the merger process be stopped forthwith.

We list out number of ambiguities in the merger proposal, which reflects how a

unilateral and unscientific decision has been taken by the Govt.:

1) Vijaya Bank is continuously earning profit for several years, the latest being Rs 382,

751 & 727 Crores for the year ending 31.03.2016, 31.03.2017 & 31.03.2018

respectively, as against the BoB figure of Rs 5396 (loss), 1383 & 2431(loss) for the

same period. Generally profit earning Bank should take over a loss making one whereas

in the instant case, a Profit making Bank is proposed to merge with a Loss making one.

2) Capital Adequacy Ratio of Vijaya Bank is 13.56 %, a parameter which is an

achievement that even the big Banks could not reach as yet. Net NPA of Vijaya Bank is

the least at 3.81 % and Return on Assets is the highest at 0.30%. Vijaya Bank is the

only public sector Bank which has paid Dividend (12 %) for the year ended 31.03.2018.

3) If we go through the history of Banking, there is not even one Bank merger that has

been successful and achieved any major accomplishment. When New Bank of India was

merged with Punjab National Bank in 1993, that has resulted in first ever loss of Rs 96

Crores to PNB. Similar losses were incurred by Oriental Bank of Commerce when Global

Trust Bank was merged with OBC. Even in the recent past, SBI incurred huge losses to

the extent of Rs. 6547.45 Crores as on 31/03/2018 after the merger of Associate Banks

with SBI.

4) Vijaya Bank is a reputed Bank of Karnataka state which was founded by farmers and

almost half of its 2200 branches are in Rural and Semi Urban Areas. It caters to

customers from all segments of the society and hence has a deep grass root connection

and is embedded with different work culture. Amalgamation of Banks with different

culture, operating in different geographical locations will be a great mismatch and

will adversely affect the overall business & profitability.



5) Consequent to the Merger, many of the merged Bank branches are likely to be

closed, as happened in SBI merger where over 2,000 branches are already closed. The

ultimate losers will be the general public, that too, marginal farmers, small traders and

weaker sections of the Society.

6) As per the dictate of the Finance Ministry, resolutions were passed by the three Bank

Boards which were not having full representation as per the Banks’ Acquisition Acts of

1969/1980. What is surprising is that on a single day, i.e, on 2 nd January 2019, all the 3

Bank Boards met at 3 pm and agreed upon the Valuation/Share Swap Ratio and within

hours, the Cabinet approved the Merger and soon afterwards the Gazette Notification

was issued – the entire exercise was completed in a few hours. Not only that, the

statement made by the Finance Minister on the 17 th of September 2018 that the 3 Banks

will be amalgamated and that the new entity will have a different Name and individual

Banks will retain their Identity etc are not implemented in the final Notification on 2 nd

January 2019.

7) The most serious problem plaguing the banking system today is that of NPAs and the

losses being made by the public sector banks is on account of loan loss provisioning.

Despite our repeated demands, RBI is not publishing the Names of the Willful

Defaulters. What is required is an overhaul of the NPA recovery regime, which makes it

more effective, speedy and transparent. The Banks involved in the merger will have to

do fire-fighting for the next few years that would adversely affect the other banking

activities as the concentration will be directed to integrate people, processes,

technological platforms and procedures. The outcome may well be higher losses on

account of provisioning and NPA accumulation, which will outweigh any efficiency or gain

that, is being projected.

8) Share swap ratio has also not been done scientifically. The Valuation was done by

unregistered Valuers and therefore the exercise is required to be treated as Null & Void

ab initio.

9) We have legally challenged the Merger decision in the High Court of Delhi as the

same is not in accordance with Banking Acquisitions Act 1969/1980. Our Writ Petitions

are posted to 13.02.2019 for final hearing.

10) The Customers & Public of Dakshina Kannada/ Udupi District have vociferously

protested against the Merger decision and several protest meetings/ Rallies were held,

the latest being on 02.02.2019 where more than 5,000 protestors, cutting across party

line, gathered at Mulky and demanded reversion of the decision.

11) Our parent body, AIBOC held a 20,000 strong Mahamorcha at New Delhi on

04.02.2019 demanding the deferment of Merger move by the Govt in the best interest

of the Customers, General Public, Shareholders & Employees in particular and the

Banking Industry in general.

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