All 463 branches of Bank of Rajasthan will function as ICICI Bank branches from tomorrow with the Reserve Bank of India (RBI) giving its approval to their merger.
"All branches of Bank of Rajasthan will function as branches of ICICI Bank with effect from August 13, 2010," the RBI said in a statement while approving the merger scheme.
The integration of BoR would help ICICI Bank to increase its branch network by 25% to about 2,500 across the country. It will also give greater visibility to the bank in the western and northern parts of the country.
ICICI Bank has about 2,000 branches while BoR has 463 spread across the country.
"I am happy [with the RBI decision]. The synergies will start from tomorrow and integration will be completed this month," said Pravin Tayal, the promoter of the Bank of Rajasthan prior to the merger.
ICICI Bank CEO and managing director Chanda Kochhar could
not be contacted for comments.
With the merger, the turnover of ICICI Bank would cross Rs4,00,000 crore. BoR has a total business of over Rs23,000 crore, against nearly Rs3,84,000 crore of ICICI Bank.
This is the third acquisition by ICICI Bank. It had earlier acquired Bank of Madura way back in 2001 and the Maharashtra-based Sangli Bank in 2007.
The shares of ICICI Bank closed at Rs963.95, down 0.74%, while those of Bank of Rajasthan slipped 0.03% to Rs190.15 on the Bombay Stock Exchange.
In May, the boards of both banks approved a share-swap deal that valued the Udaipur-based BoR at over Rs3,000 crore.
The share-swap ratio was fixed at one ICICI Bank share for every 4.72 shares of BoR.
Following approval by their shareholders, the banks moved the RBI on June 25 for regulatory clearance.
The Calcutta high court last month quashed a civil court injunction against the deal and asked the petitioner to pay a cost of Rs50,000 for filing a frivolous case.
A civil court here on June 21 had restrained BoR from holding a shareholders' meeting the same day, where an approval was being sought for merger with ICICI Bank.
Although the BoR management called off the extraordinary general meeting, the shareholders went ahead and voted in favour of the merger and the issue is now pending the approval of the Reserve Bank of India.
The same day, ICICI Bank appealed to the Calcutta high court, which in turn stayed the civil court injunction and posted the matter for hearing later.
Earlier on June 21, when BoR's shareholder meeting was underway in Mumbai, the bank's managing director received a letter from an advocate in Kolkata, informing him about the civil
court injunction.
The managing director decided to adjourn the meeting and left the venue, but shareholders decided to go ahead with the meeting. They even adopted a resolution for merger of BoR with ICICI Bank, the country's top private-sector bank. Later the resolution was sent to the authorities concerned.
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