Saraswat Bank also in race

Saraswat Co-operative Bank has decided to throw in its hat in the race for United Western Bank (UWB). The Mumbai-based bank's board meeting today extended for the second day to take a view on the offer price and other logistics.

The board last night elected Kishore Vinayak Rangnekar as chairman and Mahendra Barde as vice-chairman of the bank.

"By acquiring UWB, Saraswat intends to get a wider network of branches within Maharashtra and a business mix almost at par with its existing one. The bank has already written to the Reserve Bank of India (RBI)," a banking source said.

The merger proposal is unique since it involves the takeover of a private sector bank by a co-operative bank. It is also not clear how the RBI will react and respond to Saraswat's proposal.

Besides, the deal has to be in cash as there cannot be a share swap in this case.

Saraswat, a multi-state co-operative bank with operations in Maharashtra, Goa, Karnataka, Gujarat and Madhya Pradesh, has 86 branches in total.

The bank posted a net profit of Rs 101 crore for the year ended March 2006. The capital and reserves of the bank stand at Rs 774.26 crore, while United Western Bank has Rs 10,486 crore business.

Saraswat Co-op Bank, with its strong financial position, is confident of giving the best proposal to the RBI to protect the interest of all UWB stakeholders, the source said.