2 healthy urban co-operative banks have decided to merge

8th February 2005: Even as the Reserve Bank of India (RBI) is flooded with proposals of mergers of a large urban co-operative bank with a smaller sick or weak bank, two small, but healthy urban co-operative banks have decided to merge. These are the Co-operative Bank of Rajkot, which has a deposit base of Rs 285 crore and zero non-performing assets, and the Rajkot People’s Co-operative Bank, having deposits aggregating Rs 95 crore and NPA levels between 4-5% (which is well within RBI guidelines). According to high-level sources, the two banks are learned to have tabled the proposal for the merger to the regulator, and sought their permission. “The RBI has asked the two banks to conduct a formal due diligence, in accordance with the recently issued guidelines for merger/amalgamation of co-operative banks, and forward the report for the regulator’s perusal,” said the source.

This is the first instance of two healthy banks seeking to merge. According to an official of National Federation of Urban Co-operative Banks and Credit Societies (Nafcub), “Co-operative banks are not listed entities. Instead, they are run by democratically elected boards of directors, and it is very rare for the management of two healthy banks wanting to merge, and the depositors and shareholders okaying the merger.” Another head of a co-operative bank said: “It is not as if the banks are up for ‘sale’ or ‘available’ on account of being sick, or troubled. However, if this proposal comes through, it will set a precedent for consolidation exercises in respect of other healthy co-operative banks.

SBI has acquired majority shareholding of IOIB

3rd February 2005: State Bank of India (SBI) has informed BSE that the Bank on February 03, 2005 has finalized with the principal shareholders of Indian Ocean International Bank Ltd (IOIB), Mauritius for acquisition of over 51% equity of the IOIB along with the management control therein.

Sun Pharmaceutical Board to consider proposal for merger / amalgamation

2nd February 2005: Sun Pharmaceutical Industries Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on February 08, 2005, inter alia, to consider the proposal for merger / amalgamation of its wholly owned subsidiary companies (1) Bazley Finvest Pvt. Ltd, (2) Dhaval Finvest Pvt. Ltd and (3) Manish Finvest Pvt. Ltd, with the Company, subject to such approval / sanctions as may be required. The Board shall also consider at the same meeting the proposal for merger of Phlox Pharmaceuticals Ltd, Vadodara under Section 391 and 394 of the Companies Act 1956, the approval for merger of which is also pending with BIFR.