Canara Bank may take over smaller lenders Vijaya Bank and Dena Bank soon in order to get a bigger bank in the next round of consolidation. According to the reports, first Dena Bank and Vijaya Bank will merge before being taken over by Canara Bank. This proposal is supposed to be pushed after the monsoon session of the parliament.
The official said “It is going to be a politically active session with the GST (goods and services tax) rollout and the presidential election. Besides, it will also give time for banks to work out the possible issues that may arise”. He also added that “There have to be at least three banks of the size of the country’s largest lender SBI. And then we can have mid-sized banks and a few specialised banks catering to particular sectors”.
Dena Bank posted a loss of ₹575.26 crore for the March quarter while Vijaya Bank reported a profit of ₹204 crore for the same period.
Besides Indian Bank, Indian Overseas Bank and Syndicate Bank may also consolidate to become bigger lenders. Also, the government has asked many banks to consolidate among each other.