Mumbai, Dec 11 :    Mumbai, Dec 11:  The board of Bank of Madura (BoM) today approved the bank's merger with ICICI Bank at a share swap ratio of two BoM shares for every ICICI Bank share. The ICICI board also cleared the proposal at a separate meeting. Consequent to the merger, the equity capital of ICICI Bank will swell to Rs 219 crore from Rs 197 crore while the shareholding of ICICI, the parent of ICICI Bank, will be reduced to 55.7 per cent from 62 per cent. On a proforma basis, as on September 30, the merged entity will have total assets of over Rs 16,000 crore and deposits of over Rs 13,100 crore. It will thus create the largest new private sector bank in the country. 'The merger is full of possibilities. The large customer base, geographical reach and infrastructure managed by trained personnel will help us accelerate our growth plans,'' said H N Sinor, managing director and CEO of ICICI Bank. ICICI Bank officials said that by virtue of Kotak Mahindra's stake in BoM, it will now hold 1.2 per cent in the merged entity while the promoter of the south-based bank, K M Thiagarajan, will have a 2.7 per cent stake. ICICI Bank sources also did not rule out the possibility of Thiagarajan being given a board representation in the merged entity. On the BSE today, shares of the two banks exhibited divergent trends. ICICI Bank closed lower at Rs 165.30 after opening at Rs 180 and touching an intra-day high of Rs 183. Bank of Madura, on the other hand, was locked in the circuit and it closed at Rs 142.10. The counter was marked by only 14 trades with 1065 shares traded. Considerable synergies are expected to accrue from the combination of ICICI Bank and BoM as they bring together complementary business strengths which would enhance product portfolio, distribution network and brand image. The merged entity will have around 2.6 million customer accounts and an extensive network of about 350 branches spread across the country, giving it the critical mass in an intensely competitive banking arena. ICICI Bank said the expanded customer base and distribution network of the merged entity will provide considerable cross-selling opportunities enhancing its universal banking strategy. The enlarged distribution network also offers scope to enhance fee income particularly in core areas like cash management services. BoM has various branches in upcoming semi-urban and rural areas and its micro-credit system is expected to help ICICI Bank reach out to various rural markets. An ICICI Bank official said the bank would now reach over 50 cities as BoM already has a presence there. 'The merger also offers larger amount of low-cost deposits and possibility of reorienting assets profile to enable better spreads for the merged entity,' a press statement said. The scheme of amalgamation will now be placed before the shareholders of the two banks for their approval on January 19 next year and it will be subject to the approval of the Reserve Bank of India. The appointed date for merger is proposed to be February 1, 2001. BoM has a national network of 263 branches including presence in each of the top 30 banking centres in the country. It has very low cost deposits at 7.3 per cent. ICICI Bank's network of branches and extension counters covers 106 locations across the country.