Search

Current Affairs 1 April 2019 Digest 1: ISRO launches EMISAT & 28 satellites; Merger of Bank of Baroda, Vijaya Bank, Dena Bank

Apr 1, 2019 10:59 IST

The launch of intelligence satellite EMISAT along with 28 others came days after India successfully test-fired an Anti-Satellite (ASAT) missile under the Mission Shakti. Dena Bank and Vijaya Bank became a part of the Bank of Baroda, leading to the creation of the India's second largest Public Sector Bank after the SBI.

ISRO launches EMISAT & 28 satellites

Story 1: ISRO launches 29 satellites including EMISAT

Indian space agency, Indian Space Research Organization (ISRO) on April 1, 2019 launched the electronic intelligence satellite EMISAT along with 28 other satellites of global customers.

These 28 satellites, together weighing about 220 kg, belong to Spain (1), Lithuania (2), Switzerland (1) and the United States (24). These include 20 Flock-4A satellites and 4 Lemur satellites.

Emisat was launched into an altitude of 749 km orbit, while the 28 satellites were launched at an altitude of 504 km orbit.

The satellites were launched aboard the PSLV-C45 from Satish Dhawan Space Center in Sriharikota, Andhra Pradesh. This was the 47th mission for ISRO’s Polar Satellite Launch Vehicle (PSLV) Programme and was the 71st launch vehicle mission from Sriharikota.

For the first time, ISRO invited common people to view the launch.

India became the 4th largest space power

The launch of intelligence satellite EMISAT came days after India successfully test-fired an Anti-Satellite (ASAT) missile under the Mission Shakti in which Indian scientists successfully targeted and shot down a live satellite on a Low Earth Orbit.

With this, India became the 4th largest space power in the world. Till now, only three countries in the world – United States of America, Russia and China have achieved this.

EMISAT

Weighing 436 kg, the EMISAT Satellite has been developed for monitoring radar network by India.

EMISAT is intended for electromagnetic spectrum measurement.

It will help locate positions of enemy radars.

Rocket to be converted into a payload platform

Generally, after the launch mission is over, the rocket engine is left discarded as space debris. However, the ISRO has now started a new trend by using the engine for experiments.

Following the launches, the fourth stage of the PSLV-C45 rocket will be brought down further to 485 km and will be used as a platform for different experiments by Indian institutions including ISRO.

It will be turned into a payload platform carrying three experimental payloads.

Experimental payload

Organisation

Purpose

Automatic Identification System (AIS)

ISRO

For Maritime satellite applications capturing messages transmitted from ships

Automatic Packet Repeating System (APRS)

AMSAT (Radio Amateur Satellite Corporation), India

To assist amateur radio operators in tracking and monitoring position data

Advanced Retarding Potential Analyser for Ionospheric Studies (ARIS)

Indian Institute of Space Science and Technology (IIST)

For the structural and compositional studies of ionosphere

This will be the second time in a series that ISRO will use the launch rocket for experiments. Earlier in the last PSLV mission also, it adopted the same innovative method.

Story 2: Merger of Bank of Baroda, Vijaya Bank, Dena Bank: Power of 3

The merger of Bank of Baroda, Vijaya Bank, and Dena Bank became effective on April 1, 2019, marking the first-ever three-way merger in India's banking sector.

With this, Dena Bank and Vijaya Bank became a part of the Bank of Baroda, leading to the creation of the India's second largest Public Sector Bank after the SBI and India’s third largest lender overall after the SBI and ICICI Banks with a total business of more than Rs 14.82 lakh crore.

The amalgamation of Vijaya Bank and Dena Bank into Bank of Baroda was first announced in September 2018.

Branches of Vijaya Bank and Dena Bank to operate as branches of Bank of Baroda

As per the Reserve Bank of India, all branches of Vijaya Bank and Dena Bank will function as branches of Bank of Baroda with effect from April 1, 2019. Customers of these two merged banks will be treated as customers of Bank of Baroda.

Significance

As per the Bank of Baroda, “The combined synergy of the three banks is aimed at deepening the relationship with the customers by offering wider range of products & services, enhanced network of branches, ATMs and a different banking experience.”

The power of 3 banks will create a contemporary banking entity with an ability to do more and reach further to fulfil customers with world class offerings backed by robust processes.

Scheme of Amalgamation


The ‘Scheme of Amalgamation’ of Vijaya Bank and Dena Bank with Bank of Baroda was approved by the Union Cabinet, chaired by Prime Minister Narendra Modi, on January 2, 2019.

Alternative Mechanism

The merger of these three state-owned banks is a part of the government's agenda of consolidation of public sector banks. The amalgamation would be carried out under Alternative Mechanism. Finance Minister Arun Jaitley, who heads Alternative Mechanism, assured capital support to the merged entity. 

Other members of Alternative Mechanism included Railway Minister Piyush Goyal and Defence Minister Nirmala Sitharaman.

Note

Post this merger, the number of PSU banks will come down to 19.

 

Key Highlights of the ‘Scheme of Amalgamation’

• Vijaya Bank and Dena Bank are the Transferor Banks and the Bank of Baroda is the Transferee Bank.

Who are Transferor and Transferee?

Transferor is the party making a transfer to another party as part of a legal arrangement.

Transferee is the party who receives the funds and assets or the benefits of a letter of credit by action of a transfer.

• The undertakings of the transferor banks will be transferred to the transferee bank, including all business, assets, rights, titles, claims, licenses, approvals and all property, all borrowings, liabilities and obligations.

• Every permanent and regular officer or employee of the transferor banks will become an officer or employee of the transferee bank. 

• The pay and allowances offered to the employees of transferor banks shall not be less favourable as compared to what they are drawing in their respective transferor bank.

• The Board of the transferee bank, that is Bank of Baroda, will ensure that the interests of all transferring employees and officers of the transferor bank are protected.

• The transferee bank will issue shares to the shareholders of transferor banks as per share exchange ratio. 

• Shareholders of the transferee bank and transferor banks shall be entitled to raise their grievances, if any, in relation to the share exchange ratio, through an expert committee.

Power of 3

  • Dena Bank: Relatively higher access to low-cost CASA deposits
  • Vijaya Bank: Profitability and availability of capital for growth
  • Bank of Baroda: The extensive network and offerings

All these strengths of the three banks will translate into advantages in terms of market reach, operational efficiencies and the ability to support a wider offering of product and services.

Strengths of the amalgamated bank

• The amalgamated bank will be better equipped to meet the credit needs of a growing economy, absorb shocks and capacity to raise resources. 

• It would enable creation of a bank with scale comparable to global banks and capable of competing effectively in India and globally.

• The amalgamated bank will have access to a wider talent pool, and a large database that may be controlled through analytics for competitive advantage in a rapidly digitalising banking context. 

• Public will be benefitted in terms of enhanced access to banking services through a stronger network and easy access to credit.

Significance

The amalgamation will help create a globally competitive bank with economies of scale and enable realisation of wide-ranging synergies.

Leveraging of networks, low-cost deposits and subsidiaries of the three banks has the potential of yielding significant synergies for positioning the consolidated entity for substantial rise in customer base, market reach, operational efficiency, and improved access for customers.

How these three banks will add value to each other?

Dena Bank, with gross NPA ratio of 22 percent, is currently under the Prompt Corrective Action (PCA) framework and has been restrained from further lending. Dena bank would no longer be covered under PCA after amalgamation.

Vijaya Bank is among the better performing public sector banks with a gross NPA ratio of 6.9 percent. The Bank of Baroda has a bad loan ratio of 12.4 percent. 

The Bank of Baroda has a wide spread network, while Dena Bank and Vijaya Bank are more regionally focused. The Global network strength of Bank of Baroda will be leveraged to enable customers of Dena Bank and Vijaya Bank to have global access.

Dena Bank’s strength in the Micro, Small and Medium Enterprises (MSME) will further augment the strength of the other two banks to position the amalgamated bank for being an MSME Udyamimitra.

Merged entity will benefit from Bank of Baroda’s high Capital Adequacy RatioVijaya Bank’s strong asset quality position; and Dena Bank’s strong CASA (Current Account Savings Account) base.

Government proposes merger of Bank of Baroda, Dena Bank and Vijaya Bank under Alternative Mechanism

Bank of Baroda, Vijaya Bank, Dena Bank to set up internal committees to merge operations