Bank of Rajasthan Merger with ICICI Bank
The news about their marriage has been hitting headlines for past one month. Both these banks keep appearing in news, most of the times for wrong reasons. ICICI Bank is one of the leading New Generation Banks promoted by the country's premier Development Financial Institution for Industrial Development - ICICI which was formed in as early as 1955 for arranging foreign loans to private sector. It was lead for long years by illustrous experts like Mr S Nadkarni and Mr N Vaghul. It was during the reforms era in early nineties that ICICI Bank was promoted and headed by Mr KV Kamath, who was mentored by Mr Vaghul. The bank entered the banking scene with high technology, competitive products and services and aggressive marketing. For once, I referred it as Indian Made Foreign Bank. It took over Bank of Madura to increase its regional and southern presence. Under the Universal Banking mechanism, there was a first reverse merger between ICICI Bank and ICICI in 2002. Its business policies were some times scary.
Bank of Rajasthan's governance was never healthy in last decade and over. Serious legal problems used crop up with its top management personnel. Lastest was that of a Deputy Managing Director being pulled up by none other than the regulator, Reserve Bank of India. For whatever reasons, the latest news is that these two banks will be merged. But, today's news is that the Staff Unions of BoR are opposing the move. Further, legal issues cropped up for holding of EGM of BoR for the purpose of its merger with ICICI Bank in Kolkata courts. It is expected that both the managements would be prudent in pursuing this decision and follow all the compliances and due deligence requirements. They should not be resorting to meddling with the Share prices in the market prior to the merger. All efforts should be made for a clean and smooth end to the marriage. The transactions should be as transparent as possible to set a healthy situation in future.