The Hindu Business Line : `Federal Bank interested in taking over United Western'

Federal Bank is interested in taking over the Maharashtra-based United Western Bank. "It suits us, we are interested," Mr M. Venugopalan, Chairman, Federal Bank, told Business Line on Saturday.

(The Government of India (acting on an application by the Reserve Bank of India) today passed an `order of moratorium' on United Western Bank, effective between today and December 1, or an earlier date if alternative arrangements are made. The RBI has said that it would "consider various options, including amalgamation of United Western Bank with any other bank.")

For the Kerala-based Federal Bank, which has just taken over Ganesh Bank of Kurundwad Ltd, which is also based in Maharashtra, it makes sense to take over United Western because "we can consolidate our presence in the State," Mr Venugopalan said.

Federal Bank's interest in United Western predates the order of moratorium. In its last board meeting, Federal had decided to appoint a consultant to look into a possible takeover of United Western.

Mr S. Santhanakrishnan, Director, Federal Bank, gave three reasons why United Western coming into Federal's hands would make sense.

First, Federal has little presence in Maharashtra and, therefore, its takeover of United Western, which has many branches in western Maharashtra, would not result in any redundancy of branches. Hence, no issue of retrenchment or redeployment of staff would crop up, which might, if a public sector bank took over United Western.

Secondly, Federal has "made a small beginning" in Maharashtra by taking over Ganesh Bank of Kurundwad Ltd and United Western will help Federal consolidate its presence in the State. "We will be helped in raising the economic levels of activity," Mr Santhanakrishnan said.

Lastly, it would serve the cause of consolidation of banks better if small private sector banks that are sound are given opportunities to takeover other banks. It would help the banks become stronger.

Federal Bank was a contender for Lord Krishna Bank but could not take it over because of disputes over the valuation of LKB.

More Stories on : Private Banks | Mergers & Acquisitions

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Commodity exchange chiefs differ on FDI quantum

Home Trade: 3 broking cos suspended

Customs duty removed on 82 items from Thailand

Cadila buys 50 pc of Akshaya Apollo

United Western Bank placed under moratorium

`Federal Bank interested in taking over United Western'

Govt clears Ganesh Bank merger with Federal Bank

Review of MRP for pay channels in H2 2007: TRAI chief

CAS may be delayed due to litigations: Zee

A social canvas