Tuesday, March 4, 2008

`The RBI decides on merger of banks'

Factors at play in the HDFC Bank-Centurion deal

Chennai, Feb. 26 With the Boards of Centurion Bank of Punjab and HDFC Bank having approved the share swap ratio for the largest merger thus far in the Indian banking sector, at nearly $2 billion, the deal clears an important milestone towards the process of completion, which is expected to take about four months.
“The recommended swap ratio takes into account financial performance and position of the two banks, their relative physical infrastructure and their traded share prices over a long term,” says Mr Sanjiv Agrawal of Ernst & Young (E&Y), in an e-mail interaction with Business Line. “As against the usual company merger cases where High Courts decide , the RBI decides on merger of banks,” he adds.

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