The merger of Bank of Baroda (BoB), Dena Bank and Vijaya Bank will create the largest banking entity in Gujarat, and will challenge the market leader State Bank of India (SBI) in the state. The government believes that the merger will bring down the bad loans in the sector. The merger has a special significance for Gujarat as both, BoB and Dena Bank have a Gujarat connection in their origins. BoB has the second largest banking network in Gujarat, just below market leader SBI, while Dena Bank has the third largest network in the state. Both banks put together have more branches than any other bank in the state. With Vijaya Bank also a part of the new entity, its network will be unmatched in the state with 1,774 branches, 497 more than market leader SBI. Even after branch rationalisation, the number is unlikely to be lower than SBI. Its business mix (deposits plus advances) stand at Rs 2,21,731.74 crore, compared to Rs 2,40,908.02 crore recorded by the SBI. It has deposits worth Rs 1,47,033.38 crore, higher than Rs 1,40,261.41 crore of SBI. However, they have lower advances compared to SBI. The announcement of the merger of Bank of Baroda, Dena Bank and Vijaya Bank has special significance in Gujarat. Bank of Baroda was established in the erstwhile princely state of Baroda by Maharaja Sayajirao Gaekwad in 1908. It was one of the 14 banks that were nationalized in 1969. It is the only nationalised bank in India, that has its origins in Gujarat. Similarly, Dena Bank, too, has a Gujarat connection. Its founder Pranlal Devkaran Nanjee was a Gujarati based out of Mumbai. He had set up Devkaran Nanjee Banking Company, which was later renamed as Dena Bank. It was also nationalised in 1969. Moreover, Dena Bank is the 'Lead Bank' in the state, meaning that it coordinates the banking activity of all nationalised, private and cooperative banks in Gujarat.

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