The new valuation will now factor in the alleged price manipulation. UTI Bank itself was keen on a second opinion, which is now expected to come through in a week's time.

Sources told The Financial Express on Wednesday that the two banks, in conjuction had decided on a fresh valuation for the merger, and Deloitte, Haskins & Sells is working on it. While the initial valuation had taken into account four factors - market value, book value, earnings per share and maintainable profits - Deloitte has been given complete freedom by the two banks to decide on the ratio based on whatever parameters it deems fit.

``We have given them complete freedom. RBI is also aware of the fresh exercise and once the new valuation comes in, we will submit it for the RBI's consideration,'' a top UTI group source said. ``The new information available to us on possible manipulation of share prices will also be considered in the fresh exercise.''

The earlier swap ratio was four shares of GTB for every nine UTI Bank shares held, and some circles found it to be loaded in GTB's favour. In response to a faxed questionnaire, the office of GTB chairman Ramesh Gelli said: ``The proposed merger between UTI Bank and GTB is definitely on and there are no second thoughts on the part of either party.'' It clarified that UTI Bank has sought another opinion on the valuation and GTB does not have any differences with UTI on this. However, GTB said it was not aware of the progress of this exercise. The sources said the decision to go in for a fresh valuation was also taken by the two banks in the interest of keeping the confidence of the shareholders of the two banks intact.

Importantly, sources said that theoretically, it was possible for the fresh valuation to omit the market price aspect and concentrate solely on other parameters. However, the reference date for the merger remains the same - December 31, 2000 - since that was the basis for the merger in the first place and also the basis for the initial valuation which has been submitted to RBI. ``After the second valuation comes through, RBI will decide which one we should go for. The central bank has the powers to decide on this,'' the sources said. They also said it was not clear whether the new valuation would be significantly different from the old one.

Both banks strongly refuted reports of UTI Bank pulling out of the deal. GTB said:``Neither bank has ever talked about pulling out of the merger deal.''

The Secunderabad-based GTB also pointed out that in the earlier cases of bank mergers, it had taken about seven to eight weeks from the date of filing the application to the regulatory authority. As per that timeframe, the merger should happen before the end of April, 2001, GTB said.

UTI Bank sources also gave a time frame of six to eight weeks for the merger to be completed.

GTB also reiterated on Wednesday that the bank had not sold any shares to recover monies lent to brokers. ``Currently, the outstanding of loans to brokers is at the level of Rs 440 crore and are all fully secured even on the basis of the valuation done on March 13, 2001,'' the bank said.