Financial Technology behind banks and institutional reform science: With Special Emphasis of Case of Bank of Baroda, Vijay Bank and Dena Bank Merger

Objectives: In recent years, the Indian government has initiated several mergers among public sector banks (PSBs) to consolidate the banking sector and strengthen the financial system. Here are some notable mergers involving Indian PSBs: Merger of Bank of Baroda, Vijaya Bank, and Dena Bank (2019): This merger created the third-largest bank in India by assets. Bank of Baroda absorbed Vijaya Bank and Dena Bank to enhance operational efficiency, achieve economies of scale, and improve the overall performance of the merged entity. Merger of State Bank of India (SBI) with its associate banks (2017): SBI merged with five of its associate banks, namely State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore. This merger resulted in the formation of a larger SBI, consolidating its market position and enabling cost synergies and improved efficiency. Merger of Oriental Bank of Commerce and United Bank of India with Punjab National Bank (2020): Punjab National Bank (PNB) merged with Oriental Bank of Commerce (OBC) and United Bank of India (UBI) to create the second-largest PSB in India. The merger aimed to strengthen PNB's capital base, enhance its business reach, and improve operational efficiency. Merger of Syndicate Bank with Canara Bank (2020): Canara Bank merged with Syndicate Bank to create the fourth-largest PSB in India. The merger aimed to improve operational efficiency, strengthen the balance sheet, and create a larger entity with enhanced business capabilities. These mergers were driven by various objectives, including achieving economies of scale, enhancing operational efficiency, reducing overhead costs, and creating stronger banks capable of dealing with economic challenges. The consolidation of PSBs is also expected to improve governance, risk management, and credit quality in the banking sector.

Method: Thorough statistical analysis pertaining to T test was conducted to understand the nature of deviation in pre and post-merger phases.

Findings: The study uniquely found a substantial increase in profitability and reduction in NPA ratings in post mergers and acquisition phases.

Novelty: A thorough literature survey was conducted globally and a gap was realized wherein technology deviation on mergers was seen to be a functional trigger in profitability in banking industry. Various functional triggers which were earlier not realized were found to create substantial difference in Net banking ratings.