RBI proposes to merge United Western Bank with IDBI

The Reserve Bank of India has today placed in public domain a draft scheme of amalgamation of the United Western Bank Ltd. (UWB) with the Industrial Development Bank of India Limited. The draft scheme has also been sent to both the banks. The Reserve Bank has invited suggestions and objections on the draft scheme from the members of public, including the banks' shareholders, depositors and creditors. Both the banks have been given two weeks’ time up to Wednesday, September 27, 2006, to consider the draft scheme. The suggestions and objections should be sent to the Chief General Manager-in-charge, Department of Banking Operations and Development, Reserve Bank of India, Central Office, Central Office Building, 12th Floor, Shahid Bhagat Singh Road, Fort, Mumbai - 400 001 by the close of business on Wednesday, September 27, 2006. The Reserve Bank will take a view on the future set up of UWB soon thereafter.

It may be recalled that the United Western Bank Ltd. (UWB) has been placed under an order of moratorium on September 2, 2006. The order is effective up to December 1, 2006 or an earlier date if alternate arrangements are in place. The Reserve Bank was to decide the future set up of the UWB during the period of the moratorium.

The Reserve Bank received expression of interest from 17 entities for taking over/restructuring UWB. The only restructuring proposal was from UWB, which envisaged help of the Government of Maharashtra and other investors. These proposals have been examined keeping in view protection of the depositors' interest, expeditious resolution and avoidance of regulatory forbearance. The interest of employees and shareholders of UWB were also kept in mind.

Source : Equity Bulls

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