BoR to forward merger proposal to RBI

Capping a week of high drama, the board of Bank of Rajasthan (BoR) has decided to send the application for merger with ICICI Bank to the Reserve Bank of India (RBI) and let the banking regulator decide whether the vote conducted in the absence of the bank management at the shareholder meet is valid or not.

In a filing to the Bombay Stock Exchange (BSE), the bank said it had “decided to send the necessary application along with supporting documents for the merger process to the Reserve Bank of India for approval.”

“The board decided that since RBI is the ultimate authority, the matter should be forwarded to it,” G Padmanbhan, managing director and CEO of BoR, told Business Standard after the meeting.

The board of BoR was to meet on Thursday to discuss steps to take forward its proposed merger with the country’s largest private sector lender.

According to a person present at the meeting, there were differences among board members about the outcome of the extraordinary general meeting (EGM) as well as the legal opinion. Hence, it was decided to forward the matter to RBI.

BoR and ICICI Bank had both called EGMs to put their proposed merger to a vote. While ICICI Bank’s EGM passed off without incident, with shareholders approving the merger, BoR’s EGM was high on drama. The EGM was forced to adjourn at the last minute following a restraint order granted by a Kolkata civil court.

The stay was lifted after an order of the Kolkata High Court, which had been moved by ICICI Bank on the issue.

Meanwhile, some shareholders led by D V Lakhani conducted a poll after the board members left the venue after adjourning the meet. Lakhani and other shareholders reported that of the 6,900 ballots cast, about 99 per cent members present and 85 per cent of the value of votes cast favoured the plan to merge with ICICI Bank.

The group of shareholders sent the result of their voting to the two main stock exchanges in Mumbai and one at Jaipur, along with BoR itself.