Refreshing news

Mumbai, Sept. 13: There is more good news for the shareholders of United Western Bank. After awarding IDBI the mandate to acquire the Satara-based bank yesterday, the Reserve Bank of India today said the prescribed date of amalgamation of the two banks will be the date when the Union government notifies the scheme.

This should come as a relief to those who had acquired UWB shares after September 2, the date when the central bank imposed a moratorium on United Western Bank.

The central bank, while announcing the scheme of amalgamation of UWB with IDBI on Tuesday, said the transferee bank (IDBI Ltd) shall make an upfront payment in cash of Rs 28 per share to members of the transferor bank (UWB). It was earlier feared that those investors who had acquired UWB shares after September 2, will be left out of the offer of Rs 28 per share.

While RBI’s choice could have come as a pleasant surprise to IDBI, the stock markets today showed their appreciation of the development. Shares of both UWB and IDBI attracted a lot of interest. While the UWB scrip was locked at the 5 per cent circuit filter at Rs 22.50 on a barrage of buy orders, IDBI ended on the higher territory at Rs 71.25.

Bank board meet

IDBI said a board meeting will be held on September 21 to consider the amalgamation scheme prepared by the RBI.

“The management is examining the scheme,” the bank said. The draft scheme will be placed before the board for its suggestions, which will be taken up with the RBI.

The UWB board will meet tomorrow to take on record the draft scheme and to decide the further course of action. All eyes are now on Sicom which holds close to 10 per cent in UWB. The board of Sicom is set to meet shortly to consider the RBI’s scheme of amalgamation.