Haunted by Sebi, Bank of Rajasthan decides to merge with ICICI

Seeking it third acquisition in the last decade, ICICI Bank is all set get Bank of Rajasthan in its kitty. Boards of both the banks have agreed in principal over the merger. ICICI Bank has already begun a due diligence exercise on BoR on Tuesday.

Bank of Rajasthan is controlled by Tayal family. But the family has been haunted by the regulators. This has forced them to seek the merge the bank with the ICICI Bank, country’s second largest leader in the sector.

Bank of Rajasthan MD & CEO G Padmanabham told that the decision of amalgamation of the bank with the ICICI was taken in a brief board meeting. He said that the approval was given in principal and majority of the shareholders are thinking of swapping their shares with ICICI Bank shares,

Under the merger plans, a BoR shareholder will get 25 ICICI Bank shares for every 118 BoR shares held. ICICI Bank MD & CEO Chanda Kochar, however, says that the swapping of the shares depends on the due diligence.

After acquiring BoR a decade ago, the Tayal family was recently under the scanner of the regulator Sebi, which questioned the shareholding of the bank. The regulator had banned 100 entities which were holding BoR shares on behalf of the promoters.