BOB’s Integration Challenge

INDIA’S FIFTH LARGEST bank was well on track for a complete transformation with new professional management when a government announcement changed its entire game plan. The government announced that the Bank of Baroda would now have to absorb two mid- sized players – Dena Bank and Vijaya Bank in a threeway merger. Of these, Dena Bank has very high NPAs and is already under the prompt corrective action ( PCA) of the Reserve Bank of India. Integrating technology, branches, and people will prove a major challenge now. And the asset quality issue will also play havoc with the good work done by the BoB team in the last three years. At a time when competition from more agile Fintechs, Payment banks, and small finance banks is rising, the Bank of Baroda will have to take a few steps backward if the integration is to be pulled off.