Mumbai, Jan 24 :    Mumbai, Jan 24:  In a move that caught the financial world by surprise, UTI Bank Ltd and Secunderabad-based Global Trust Bank today decided to merge to form the largest new generation private sector bank that will be renamed as UTI Global Bank. Mutual fund major Unit Trust of India, which is the main promoter of UTI Bank will continue to be the principal shareholder of the merged entity which will be the largest private sector bank in terms of assets, deposits, profits and branch network. A memorandum of understanding to this effect was signed here today, UTI chairman P.S. Subrahmanyam said. In a late evening communique to the Bombay Stock Exchange, the two banks said their boards of directors will meet on Saturday (January 27) to consider the scheme of amalgamation and the swap ratio as per the valuation report submitted by SBI Capital Markets Ltd, which acted as an advisor to both the banks. P J Nayak, chairman and managing director of UTI Bank, will be the chairman of UTI Global Bank while Ramesh Gelli, chief of Global Trust Bank, will be on the board. In a press communique issued later, SBI Capital Markets said Gelli will spearhead the merged bank's foray into the insurance sector. S. Subasri, who is the executive director of Global Trust Bank, will join the board of UTI Global Bank as executive director. The merged entity will have a network of 157 branches and 321 ATMs (automated teller machines) across the country. At the end of December 2000, their combined networth was Rs 928.82 crore, advances touched Rs 7,904.24 crore, and deposits amounted to Rs 15,665.13 crore. The net profits of the two banks aggregated Rs 161.24 crore. The merger mania among private sector banks was sparked when HDFC Bank took over TimesBank. Soon after, ICICI Bank and Bank of Madura unveiled their merger plans which was cleared last week by the shareholders of the two banks. 'UTI Global bank is expected to effectively combine the strengths and complementary features of the two banks. It will be strongly capitalised with a networth likely to exceed Rs 1000 crore by the end of March 2001,' the statement said. The bank will also have a well-diversified branch and ATM network, reinforcing the existing retail strengths of the two banks, the statement added. UTI Bank, which started operations in 1994, is one of the four private sector banks that has yet to meet the Reserve Bank of India's norm that requires promoters of the bank to dilute their stake to 40 per cent by March 2001. Global Trust Bank, on the other hand, has already complied with this stipulation. For the year ended March 31, 2000, UTI Bank's deposits rose to Rs 5700 crore and advances stood at Rs 3500 crore. The bank with a total ATM network of over 135 is planning to expand it to over 300 by the end of this year. Global Trust Bank was incorporated in 1993 and it was promoted by Ramesh Gelli, Jayanta Madhab and Sridhar Subasri. It came out with an public issue of 2.6 crore shares at par in August 1994. International Finance Corporation (IFC), Washington and Asian Development Bank, Manila are equity partners in the bank. The deposits of the bank stood at Rs 6198.85 crore, registering a growth of 52 per cent. The gross income during this period stood at Rs 879.12 crore.