The shares of Bank of Baroda (BoB), India's second largest state run bank by market capitalization, tanked by 14.2% early Tuesday on National Stock Exchange (NSE). The share prices plunged after the government decided to merge BoB with the Vijaya Bank and Dena Bank. However, this move by the government has failed to motivate the investors.
The decision to merge the three banks was taken to tackle the issues of bad loan or non-performing assets (NPAs) and strengthen the credit growth.
The shares of Dena Bank climbed by 20% at Rs 19.05 per share and Vijaya Bank's stocks rose by 10% to Rs 66 per share.
Finance Minister Arun Jaitely said that the merger will go on to make the banks stronger and most importantly strengthen their lending capability.