The Reserve Bank of India (RBI) has said in a statement that the ICICI Bank, India's largest private-sector bank in terms of capitalization, and Bank of Rajasthan (BoR) stands merged with effect from close of business on August 12, 2010.
All the 463 branches of BoR will function as branches of ICICI Bank with effect from August 13, 2010, RBI said in a statement.
The amalgamation of BoR with ICICI Bank has been sanctioned by the RBI in exercise of the powers contained in sub-section (4) of section 44A of Banking Regulation Act, 1949.
A leading private-sector bank, BoR is having branches all over India with prominent presence in Rajasthan, specialized forex and Industrial finance branches.
Following the amalgamation, BoR Managing Director & CEO G. Padmanabhan, who was appointed by RBI on November 20, 2009, has stepped down with effect from August 13.
The bank's Board slated to meet on August 13 to consider the first quarter results has been canceled, it informed the Bombay Stock Exchange. The RBI has fixed Rs.154.50 as the share price for the dissenting BoR shareholders.
On May 23 last, the ICICI Board approved the amalgamation scheme, sanction for which was accorded by the shareholders through a poll at an extraordinary general meeting of the bank held on June 21 at Vadodara with a two-third majority.
According to the merger agreement, a BoR investor will get 25 equity shares of ICICI Bank for 118 BoR shares. The proposed amalgamation would enhance ICICI Bank's branch network especially in the northern and western India. Earlier ICICI Bank had said it would absorb 4,000 BoR employees.
On August 2 last, the employees union of BoR filed a writ petition in the Rajasthan High Court protesting the merger. A lower court in Kolkata had given a stay order for BoR's EGM to accord the merger proposal. However, some shareholders managed to continue with the EGM and approved the merger.
It is understood that BoR employees have expressed willingness if there is no down-gradation of their portfolios and get due recognition from ICICI Bank.
At the BSE, shares of Bank of Rajasthan are trading up by Rs.12.10 or 6.36% at Rs.202.25 per share while the shares of ICICI Bank rising by Rs.13.65 or 1.42% at Rs.977.60 a share.
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