MUMBAI: Promoters of Bank of Rajasthan have decided to merge the bank with the country’s largest private sector bank- ICICI Bank.
BoR informed the stock exchange that it received a communication from Sanjay Kumar Tayal, director and one of the promoters to convene a board meeting on May 18 as they have entered into an agreement with ICICI Bank for proposing an amalgamation. ICICI Bank board is also meeting today evening.
ICICI Bank is learnt to have indicated that it’s willing to pay more than BoR’s present market valuation. ICICI Bank scrip today closed at Rs 889.35in the Bombay Stock Exchange, down by 1.45% while the BoR scrip rose sharply by 19.95% to Rs 99.5.
According to banking circles, the Tayals, who acquired BoR a decade ago, have been under pressure to sell the old private bank which is grappling with directives from Sebi and RBI. In March, Sebi banned 100 entities allegedly holding BoR shares on behalf of the promoters from all stock market activities.
A little earlier, RBI had slapped a penalty of Rs 25 lakh on the bank for a string of violations like deletion of records in the bank’s IT system, irregular property deals and lapses in the accounts of a corporate group.
In the past few months, the central bank has virtually taken over BoR. The RBI appointed a new CEO for the bank, which currently has five RBI nominated directors.
Significantly, well before the downturn, ICICI had considered the possibility of taking over BoR. But the deal fell through as ICICI was unwilling to fork out the money Mr Tayal had asked for.