RBI proposes merger of Ganesh Bk with Federal Bk

Reserve Bank of India (RBI) today placed in public domain a draft scheme of amalgamation of Ganesh Bank of Kurundwad with Federal Bank.

RBI has invited suggestions and comments from the public, including the banks' shareholders, depositors and creditors, on the draft scheme.

According to a release issued by the central bank today, the draft scheme has also been sent to both the banks. "Both the banks have been given two weeks' time, up to January 21, 2006, to consider the draft scheme. The suggestions and comments would be received by both the banks and the Reserve Bank up to January 21, 2006. The Reserve Bank will take a view on the future set up of Ganesh Bank soon thereafter," the release added.

It may be recalled that Ganesh Bank of Kurundwad was placed under an order of moratorium on January 7, 2006. The order is effective up to April 6, 2006 or an earlier date if alternate arrangements are in place.

"Federal Bank has, among other things, proposed to pay the depositors fully. The Reserve Bank has examined the proposal received from Federal Bank keeping in view its financial parameters, retail network and synergies as well as strategic advantages. Taking into account the interest of depositors of Ganesh Bank of Kurundwad as well as the bank's strengths and weaknesses, the Reserve Bank has prepared a draft scheme of amalgamation," the release added.