| ICICI Bk, Sangli Bk deal seen around Rs 75cr |
| BS Reporter / Mumbai December 8, 2006 |
| The country's second largest bank, ICICI Bank, is set to acquire The Sangli Bank, a 90-year-old, financially-weak private sector bank. ICICI Bank's board will meet tomorrow to consider merging Sangli Bank with itself. Analysts said ICICI Bank could buy Sangli Bank, which has 186 branches, for around Rs 75 crore. The bank had capital plus reserves of Rs 82.36 crore as on March 31, 2006. Sangli Bank had failed over the last couple of years to take steps to raise its networth to Rs 300 crore, the minimum stipulated by the RBI. Sangli Bank officials could not be contacted for comments, but banking sources said the deal has already been struck, probably brokered by the RBI, and the board meetings would just be a formality. Sangli Bank would be the first case of a weak bank being acquired by a stronger bank without the RBI putting it under a moratorium. Two other old private sector banks from adjoining regions -- United Western Bank and Ganesh Bank of Kurundwad -- were recently merged based on schemes of amalgamations announced by the RBI after putting them under moratoriums. While United Western was merged with Industrial Development Bank of India, Ganesh Bank was merged with Federal Bank. RBI clamps down on Sangli Bank Business Standard had reported on November 16, 2006 that the Reserve Bank of India (RBI) has imposed restrictions on the ailing Sangli Bank, including expansion of advances, as the small-size private sector bank |
