Insta
Moody’s Gives Thumbs Up To Modi’s Decision, Says Bank Merger Will Lead To Better Governance
Swarajya Staff
Sep 18, 2018, 05:04 PM | Updated 05:04 PM IST
Save & read from anywhere!
Bookmark stories for easy access on any device or the Swarajya app.
The global ratings major Moody’s gave its approval to the government proposal to merge three public sector banks namely the Bank of Baroda, Dena Bank and Vijaya Bank. The rating agency believes that the merger will be credit positive and also improve the governance levels in the merged bank.
A Moody’s official said that the merger would lead to economies of scale and create the third largest bank in terms of loan book. Among the banks to be merged, Bank of Baroda and Vijaya Bank have a better profile in terms of capitalisation, profitability and asset quality. A statement by the company in the context of the merger stated “we expect the merged entity will require capital support from the government, otherwise such a merger would not improve their capitalisation profile”.
The merger of the banks is part of the government’s consolidation strategy as they seek to tackle the pile of bad debt on the books of public sector banks.
Save & read from anywhere!
Bookmark stories for easy access on any device or the Swarajya app.
Support Swarajya's 50 Ground Reports Project & Sponsor A Story
Every general election Swarajya does a 50 ground reports project.
Aimed only at serious readers and those who appreciate the nuances of political undercurrents, the project provides a sense of India's electoral landscape. As you know, these reports are produced after considerable investment of travel, time and effort on the ground.
This time too we've kicked off the project in style and have covered over 30 constituencies already. If you're someone who appreciates such work and have enjoyed our coverage please consider sponsoring a ground report for just Rs 2999 to Rs 19,999 - it goes a long way in helping us produce more quality reportage.
You can also back this project by becoming a subscriber for as little as Rs 999 - so do click on this links and choose a plan that suits you and back us.
Click below to contribute.