OBC, Dena Bank merger being explored

Delhi-based Oriental Bank of Commerce OBC is believed to have initiated merger talks with Dena Bank. OBC is believed to be mulling the option of acquiring Dena Bank to strengthen its presence in the western part of the country. According government sources, the idea of merging Dena Bank with OBC is being pursued at top levels of both the banks and is likely to be executed after the second public offer of Dena Bank, slated towards the end of this fiscal.

The reasons favouring themerger proposal is that Dena Bank will need constant supply of capital. Even after the forthcoming Rs 80 crore capital issue, the bank would need more capital after the implementation of Basel II norms, but cannot access the capital market as government8217;s stake in the bank post-issue will be cut to 51.18 pc.