RBI wants bids with capital infusion of Rs 350 cr in UWB tomorrow

Mumbai, Sep 6 (UNI) The Reserve Bank of India (RBI) today asked the United Western Bank to submit bid for Rs 350 crore capital infusion for revival.

In a letter sent to UWB, the central bank has also given a deadline for banks and institutions -- having evinced interest in the take over of UWB through their Expression of Interest -- until Thursday morning to bid for the bank, which is under moratorium since Saturday last.

Speculation is rife amongst banking industry circles that RBI has also asked the State Industrial and Investment Corporation of Maharashtra (SIICOM) -- a state government enterprise -- in particular to bail out UWB with the requisite capital infusion for the revival.

The apex bank opines that while amalgamating with a bank will be safe for depositors of UWB, giving SIICOM a chance to bring capital will bring shareholders relief.

Meanwhile, the Investors' Grievances Forum (IGF) headed by Dr Kirit Somaiya stated that the UWB did not take an active interest in recovering loans of two entities.

In this context, Mr Somaiya, the former BJP MP, cited that Emtex industries owes Rs 49.91 crore and Maliram Makharia stockbrokers owe Rs 7.44 crore. While Emtex's loans have been classified as doubtful, Maliram Makharia stockbrokers has declared a loss.

He also expressed displeasure with the Central government saying, ''it acted in haste in issuing the Order of Moratorium on UWB as just six months ago the bank was healthy and wealthy and a Rights Issue was also allowed by both regulators RBI and SEBI.'' Raising a poser, IGF president said, ''Why RBI did not ask merger first before declaring moratorium of UWB, like it was done in the case of Global Trust Bank, which was taken over by the Oriental Bank of Commerce.'' The government should seek an explanation from the two merchant bankers -- A K Capital and Centrum, as to how did they arrive at the valuation of Rights Issue of UWB six months back at Rs 24 per share, if the bank was not healthy enough to run, Mr Somaiya added.

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