RBI told to take up plea against LKB merger

The Kerala High Court has asked the Reserve Bank of India to consider the representation by A T Jacob, a shareholder of Kochi-based Lord Krishna Bank (LKB), over its merger scheme with Centurion Bank of Punjab (CBoP).

Disposing a writ petition by Jacob to declare the merger scheme null and void, judge Sirijagan said that the court didn't want to intervene in the merger procedure as the petitioner had already approached the RBI seeking to declare the scheme null and void. The judge said that the RBI should consider the petition that was submitted by A T Jacob on August 1, 2007.

Jacob had argued that the second extension of the scheme from August 1 to October 31 was violative of the relevant rules and regulations of the RBI Act.

According to the scheme, in the event that the effective date did not occur by April 30, 2007, or by such later date as may agreed to by and between the respective boards of directors of CBoP and LKB, the scheme shall become null and void.

Jacob said that as per the clause, a second extension of the scheme would become null and void.