BoR merges with ICICI Bank
ICICI Bank is likely to acquire Bank of Rajasthan, a smaller private sector bank that had run into trouble with regulators earlier this year.
ICICI will offer 25 of its shares for every share in BoR. The stock price of BoR was up 20 per cent to Rs 99. 50 during the day, up on the news. The news would come as a big relief for the shareholders and depositors of BoR, which has run into troubles with regulators recently.
On Tuesday, the board of ICICI Bank has given an in-principle approval to a merger with Bank of Rajasthan, subject to relevant approvals.
Acquiring BoR will give ICICI 463 branches and an asset base of Rs 17,724 crore.
The new branches will be a welcome addition for ICICI Bank which has been trying to scale up its retail presence over the past year. ICICI Bank currently has 2,000 branches — the largest branch network amongst private sector banks.
The union of bank employees has opposed the merger with ICICI, asking for a merger with a public sector bank instead.
Bank of Rajasthan had run into major problems with the regulators earlier this year. In March, stock market regulator Sebi passed an order against 100 entities that allegedly colluded with BoR promoters to hide the true shareholding structure of the bank.
The promoters had allegedly shown that they were cutting their shareholding in line with Sebi norms while they had actually raised it with the help of colluders.
RBI had also ordered a special audit of BoR’s books after it found lapses in corporate governance and disclosure norms.
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