"We confirm that so far no proposal for merger of United Bank of India with IDBI Bank has been discussed at IDBI Bank's board meeting and also no communication from Government of India in respect of the above has been received by the bank," IDBI Bank said in a statement.
Meanwhile in separate statement, United Bank of India said that there is no negotiations taking place for merger of the bank.
"No negotiations are taking place for the merger of the bank with any other bank," United Bank of India said.
Shares of United Bank of India were trading at Rs 53, up 8.16 per cent on the BSE, while IDBI Bank was trading at Rs 91.10 per unit, up 1 per cent.
Both the banks are public sector entities with government of India having 76.50 per cent and 89.47 per cent stake in IDBI Bank and United Bank of India respectively.
"As soon as any communication from Government of India is received by IDBI Bank or any such proposal is discussed at IDBI Bank's board meeting, necessary disclosure under clause 36 of the Listing Agreement shall be made by the bank," it said.
Saddled with over 10 per cent gross non-performing assets, United Bank of India scripted a turnaround in the fourth quarter of 2013-14 by reporting an over 15-fold jump in net profit to Rs 469 crore on the back of cash recovery and upgradation of accounts.
In the January-March 2013 quarter, the bank had posted a profit of Rs 31 crore.
The banks gross NPAs had jumped by Rs 4,001 crore in six months till December largely on account of a change in accounting practices.
At the end of March 2014, the bank's gross bad loans were at Rs 7,118.01 crore, compared with Rs 8,545.5 crore in the three months earlier.