RBI approves merger of Lord Krishna Bank with Centurion Bank of Punjab

The Reserve Bank of India has sanctioned the Scheme of Amalgamation of Lord Krishna Bank Ltd. with Centurion Bank of Punjab Ltd. The Scheme has been sanctioned in exercise of the powers contained in Sub-section (4) of Section 44A of the Banking Regulation Act, 1949. The Scheme will come into force with effect from August 29, 2007. All the branches of Lord Krishna Bank Ltd. will function as branches of Centurion Bank of Punjab Ltd. with effect from August 29, 2007.

RBI decision follows a dismissal of a petition against the merger by the Kerala High Court.

The LKB-CBoP merger in the ratio 5:7 was approved by the AGMs of the respective banks in September 2006. However, one of the shareholders Umeshkumar Pai had challenged the merger and had sought an investigation into the affairs of LKB, while arguing that the decision was taken without sufficient discussion and many shareholders were not permitted in the meeting hall.

The merger will add Rs 300 crore to CBoPís balance sheet, which is around Rs 18,480 crore at present, and another 112 branches to its current 279 branches. CBoP plans to add more than 200 branches by December 2007.

The all-stock merger deal of LKB with CBoP followed the acquisition of Bank of Punjab by Centurion Bank, after which it was rechristened as CBoP

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