The Hindu Business Line : IDBI board approves UWB merger proposal

The board of IDBI Ltd at its meeting held on Thursday considered the provisions of the draft scheme of amalgamation of the United Western Bank of India (UWB) with IDBI Ltd, said Mr V.P. Shetty, Chairman and Managing Director.

Sources in IDBI, however, confirmed that the board had approved the proposal to merge with UWB. "We will send our comments to RBI shortly. We have time till September 27, which is the last day given by RBI to consider the scheme," he said.

When asked about the price of Rs 28 per share that IDBI has been asked to pay to UWB's shareholders, Mr Shetty said, "What is not agreeable about it? We have quoted the price. We did our homework."

The outgo for IDBI works out to Rs 150 crore, he said. About issues related to employee rationalisation, Mr Shetty said, "Such issues are there in every organisation. There will be no retrenchment, no loss of job."

It is possible to bridge the technology platforms of both banks, though UWB's platform is created by CMC and IDBI's by Infosys, he said.

On September 12, RBI announced the amalgamation of UWB with IDBI. As per the scheme, IDBI was to make an upfront payment in cash of Rs 28 for every fully paid-up share held in UWB.

UWB was placed under a moratorium on September 2 by the Union Government on RBI's advice igniting a scramble for ownership of the bank.

Earlier this week, a group of depositors of UWB filed a petition in the Bombay High Court challenging RBI's decision to place the bank under moratorium. The court has asked RBI to file its affidavit on September 27.

When asked if this development could affect IDBI's plans to merge with UWB, Mr Shetty said the case is between RBI and the depositors.

The shares of IDBI closed at Rs 75.2 on the BSE on Thursday against the previous close of Rs 73.9, while shares of UWB closed at Rs 25.4 (Rs 25.3).

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