UWB merger: BoM jumps in fray, Corp Bank to decide tomorrow

New Delhi, Sep 6 (UNI) Bank of Maharashtra (BoM) today joined the race for taking over the struggling United Western Bank (UBW) as Karnataka-based Corporation Bank also makes a move towards joining the bandwagon.

The BoM said it had decided to put in an Expression of Interest (EOI) to the Reserve Bank of India (RBI) for acquisition of UWB, while the Board of public sector Corporation Bank had decided to meet on the issue tomorrow, which would take up the total number of suitors to ten.

With more public sector banks coming forward for the UWB, the chances for private and foreign institutions seems to be getting bleak, as public sector banks get preference over their private counterparts, it is learnt. SICOM holds about 10 per cent equity of UWB.

However, with Maharashtra government and SICOM, the State Finance Corproation, taking interest in the matter and expressing desire to bring in cash to recapitalise the bank, the experts say, the SICOM, being a state-owned institution, has an edge over other suitors.

Looking at the wide rural network of UWB, still more banking institutions -- which either don't have adequate market access in Maharashtra or are planning to expand base in the state -- are likely to jump in the fray.

UBW has Rs 7,000 crore assets spread across nine states in the country and nearly 20 lakh depositors, which is enough for fulfiling the ambitions of interested parties.

As of now, the number of public sector banking institutions interested in the UWB has increased than other private and foreign suitors.

Among others, who have joined the list of interested parties, were ICICI Bank, Canara Bank, Andhra Bank, Standard Chartered Bank, Federal Bank, Allahabad Bank and Citigroup.

A few years ago, the RBI had merged Global Trust Bank and Nedungadi Bank with Oriental Bank of Commerce and Punjab National Bank -- both state-run -- respectively.

However, ICICI had also acquired a southern India's Bank of Madura.

UNI VJ PV KP1910