Bank consolidation blues: Forced mergers could be a tricky affair

After it merged five associate banks into SBI last year and followed it up with LIC's proposed takeover of IDBI Bank, govt is now amalgamating Bank of Baroda, Dena, and Vijaya Bank

On Monday, the central government announced that it wanted to amalgamate three public sector banks (PSBs) — Bank of Baroda, Vijaya Bank and Dena Bank — to create a new entity, which would be the third largest lender in India. The boards of the banks are expected to meet over the next fortnight to take a call on the all-stock deal, but that seems a mere formality now. The move is the latest in line with the government’s thinking that PSBs need consolidation. It merged five associate banks into the State Bank of India last year and followed it up