New Delhi: Almost three weeks after the announcement to merge Bank of Baroda, Vijaya Bank and Dena Bank was made by the government, board members of the state run banks have given their approval to form India’s third largest bank. According to a report by news agency PTI, proposal has been sent to the government for its official approval. The Central government, on October 17, announced the merger of the three banks to come up with a strong banking institution by bringing together the resources and management. “The boards of all the three banks have approved (the merger proposal) and sent the recommendations to the government. We are in early stages of rolling this out. The next step would be the government approving formally the merger process, and then the swap ratio,” Bank of Baroda managing director and chief executive officer PS Jayakumar said.

He also mentioned that the merger will take a span of four to six months from now. Last month, the boards of all the three lenders had given in-principle approvals for the proposed merger. The merger will be the first-ever three-way consolidation of banks in India, with a combined business of Rs 14.82 lakh crore, making it the third largest bank after State Bank of India (SBI) and ICICI Bank.

As per reports, the merger of these three state run banks would take place through share swap, which will be the part of the scheme of merger. After the merger happens, the total number of state-run banks will come down to 19. Out of the three, Dena Bank has the highest number of non-performing asset (NPA) ratio heaving above 11 per cent and also has the lowest business of just Rs 1.72 crore. While the remaining two banks are comparatively low on NPAs and have higher businesses.

Last year, India largest lender State Bank of India (SBI) merged with five of its subsidiary banks and acquired Bharatiya Mahila Bank. After the merger, SBI now has a total assets of Rs 550 billion in combined.