After approval of the Cabinet, Dena Bank and Vijaya Bank are set for merger in Bank of Baroda. After the merger, the name of the new entity coming into existence will not change, but some changes are possible for these bank account holders, investors and borrowers.
After the merger, the increase in the number of bank branches and ATMs will help most customers. The new bank will come in a very strong position in terms of total assets, so that your deposits in these banks can be safe and secure. Also, the confidence of the investors in the stock market will also increase and after the merger they can get the benefit of the stability of the bank.
Customer Id could change
The account holders of these three banks could face many changes. Savings account interest rate may also change. Customers holding account in new unit will be issued a new cheque book and debit or credit from the bank.
Apart from this, the account number and customer ID can also be changed. With the merger, the branches of these banks will also be merged, it is possible that your branch will also be changed. Due to changes in the bank branch, the IFSC code of your account will also change.
In such a situation, you have to update it at places like income tax department, insurance company and mutual funds. There may be some changes in your bill payment guidelines too.
If you have opened an FD in any of these banks then it is possible that after the merger, your bank’s name may change, but there will be no change in the interest rates available on it. This is because the fixed interest on fixed deposits or FD is determined for a fixed term, and it is not possible for banks to make changes in between. Therefore, even if there is a change in the deposit rate of the new unit after the merger, even then the maturity will get pre-determined interest on your FD.
EMI burden will not increase
There is no need to get worried about the merger of the holders of any of the three banks. After the merger, the amount of your loan will be transferred to the new unit and the EMI will continue to be repaid in the same way as before.
If your loan is based on the rate of MCLR, then the EMI will be created at the end of the term, at the rate of the new rate. At the same time, such customers whose debt is fixed at the base rate, they can easily shift to MCLR after the merger. However, for this, bank can take valuation and processing fees.
Shares will be swapped
The format of the Indian stock market is such that there are several ways to save small investors here. Shares of investors will automatically be adjusted according to the fixed format. Market experts say that at the appointed time, the deposited shares will be exhausted before the investors’ demat account and they will be replaced in a new stock account.
According to the fixed proportion to the shareholders, the shareholder of Vijaya Bank will get 402 shares of BOB per 1000 shares, while Dena Bank’s shareholder will receive 110 shares of BOB per 1000 shares. This difference came from the valuation of the shares.