Federal, Catholic Syrian Bank merger soon

Font Size

Print

Feedback

Email

Discuss

Related Articles

Green energy attracts global players'Millionaires to rise in India despite slowdown'3 banks raise non-resident deposit ratesCentre sends out 11.5% rate signal

The merger of Kerala-based bank Federal Bank and Catholic Syrian Bank (CSB) could soon be a reality. Federal Bank has managed to get three of its nominees on the CSB board.

Federal Bank sources confirmed to FE that they are moving towards a merger and added that the moves have been approved by Surachan Chawla, an NRI who holds 27% of CSB shares.

Thailand based Chawla had brought 38% stake in the unlisted CSB in 1994. But the move was not approved by the RBI. While approving the share transfer after several years, the RBI made it clear that Chawla has to divest his holdings to 10%. Federal Bank had recently brought a strategic stake of 4.9% CSB in July 2008.

Federal Bank could now have the green signal for a takeover. In its 87th AGM held in Thrissur on Friday, C F John, Jos C Chakko, N R Achan, C K Gopinath, and Ipe Peter were elected as directors of the bank. Achan, Gopinath and Peter are said to be supporters of Federal Bank and could play a crucial role in the merger decision.

Chawla and the Mauritius-based AIF Capital Development have one man each on the eleven member board. Furthermore, another group led by a prominent banker and stock broker has also pledged its support to the cause of the Federal Bank. The merger move also has the approval of the trade unions of both banks. Sources said that Federal Bank has managed a board that could help it in the takeover bid. The sources further said that a special general meeting of CSB shareholders could approve the merger and that the banks are likely to take a combined decision on the share swap before approaching the RBI.

Several big names including Kerala-based South Indian Bank (SIB) were in the fray to take over CSB.

Thrissur Archdiocese had a role in promoting CSB and had opposed the takeover of the bank by Chawla. CSB has 316 branches, over 125 ATMs, and a net profit of Rs 36.56 crore in 2007-08 on revenues of Rs 5,960 crore.