Shetty: Agreed

Mumbai, Sept. 21: The board of Industrial Development Bank of India (IDBI) has cleared the draft scheme of amalgamation between United Western Bank and IDBI.

The plan was announced by the Reserve Bank of India (RBI) this month.

“We have time till September 27 and we will submit our comments and suggestions to the Reserve Bank before that,” IDBI chairman and managing director V.P. Shetty said.

The meeting, he said, has considered various provisions of the scheme and will submit its suggestions to the apex bank.

He declined to comment when asked if the board was satisfied with the amalgamation scheme.

IDBI was handpicked by the central bank to acquire the ailing United Western from among 17 contenders.

The board of United Western Bank is scheduled to meet on Friday to consider the draft scheme of amalgamation.

“The board has taken on record the draft scheme of amalgamation. Its views and suggestions form a privileged communication and it cannot be in the public domain,’’ sources close to the bank said.

IDBI was up against some strong contenders like ICICI Bank, Corporation Bank and Canara Bank.

The draft scheme contained a proviso that IDBI will make an upfront payment in cash of Rs 28 per share to the shareholders of United Western Bank. It is now learnt that this proposal was mooted by IDBI.

IDBI was selected on a few parameters that included a commitment that it will not retrench employees from the bank.

Moreover, the apex bank also saw other positive points in the merger. It does not expect any cultural problems to arise from the amalgamation. Moreover, there are no branch overlaps between the two entities.