The government has finalised the decision to infuse Rs 5,042 crore into public sector lender Bank of Baroda (BoB) ahead of its amalgamation of Dena Bank and Vijaya Bank with itself.
The merger would come into effect on April 1.
Through its notification on Wednesday, the Union Ministry of Finance conveyed its decision pertaining to capital infusion of Rs 5,042 crore in BoB, the bank said in a regulatory filing.
“The capital infusion will be by way of preferential allotment of equity shares (special securities/bonds) of the bank during 2018-19, as government’s investment,” said the bank.
As mentioned in the Scheme of Amalgamation, shareholders of Vijaya Bank will receive 402 shares of BoB for every 1,000 shares held. However, in case of Dena Bank, its shareholders will acquire 110 shares for every 1,000 of BoB.
In September last year, the Centre had announced the merger of Vijaya Bank and Dena Bank with Bank of Baroda, intending to form the third-largest lender after State Bank of India (SBI) and ICICI Bank.