Maharashtra Govt bails out UWB through SICOM, HDFC

Mumbai, Sep 7 (UNI) The board of United Western Bank (UWB) today unanimously resolved to submit the Reconstruction Scheme for its revival with the assistance of the Maharashtra government and two other leading investors' financial support.

The two leading investors, Housing Development Finance Corporation (HDFC) and Infrastructure Development Finance Corporation (IFDC), have joined hands with the Maharashtra Government through its arm SICOM (State Industrial Investment Corporation of Maharashtra) - which holds a 10 per cent equity stake in UWB - to extend a Rs 350 crore financial-support for the revival of the bank, which is under moratorium since Saturday last. UWB has conveyed this in a notice issued to BSE here today.

HDFC proposes to invest an amount of up to Rs 70 crore with any one or more of its subsidiary companies in the aggregate by way of equity in UWB, subject to such terms and conditions as may be imposed by Reserve Bank of India (RBI).

Similarly, IDFC to invest an amount of up to Rs 35 crore in the aggregate by way of equity in UWB, a public limited company engaged in the banking business.

Further, both HDFC and IDFC informed that the investment will be made by it with SICOM and the Government of Maharashtra.

Maharashtra Government's investment arm SICOM is expected to make good the balance of the capital infusion required for the revival of the UWB under the Reconstruction Scheme bid submitted to the RBI this morning. SICOM officals met UWB members on Sept 4, 2006, to discuss the reconstruction of the bank, for which regulatory approval would be sought from RBI, according to the state's finance minister Jayant Patil.

SICOM is one of the contenders in the UWB-takeover battle apart from ICICI Bank, Federal Bank, Andhra Bank, Allahabad Bank and Canara Bank, besides Saraswat Co-operative Bank.

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