Cabinet clears three banks merger

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday decided to extend a 3 per cent interest subsidy for hundreds of items produced by labor-intensive sectors like agriculture, textiles and leather that also make up for a sizeable chunk of MSMEs.

 “The proposal will entail benefits of around Rs 600 crore to exporters on interest equalisation for the remaining period of the scheme,” the government said in a statement. The cabinet also approved a scheme for the proposed amalgamation of Bank of Baroda (BoB), Vijaya Bank and Dena Bank to create the country’s second-largest public sector lender (after SBI). The amalgamation will take off from April 1. As per the scheme, the businesses, assets and liabilities of Vijaya Bank and Dena Bank will be transferred to BoB.

Separately, the Cabinet cleared a proposal to amend the Trade Unions Act, 1926 for making provisions regarding recognition of trade unions. The Act currently provides for only registration of trade unions. However, the recognition of trade union is governed by guidelines in the ‘Code of Discipline’ evolved in 1958, voluntarily accepted by employers and employees. The explicit recognition is crucial, as recognised trade unions will likely have more bargaining power with employers.

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