Mumbai: The Reserve Bank of India (RBI) has approved the amalgamation of Lord Krishna Bank Ltd (LKB) with Centurion Bank of Punjab (CBoP) and said that the merger would be effective from 29 August 2007.
The merger would be effective from 29 August, with the appointed date being 1 April 2006, CBoP said in a filing to the Bombay Stock Exchange.
As per the terms of the scheme, the Bank would issue up to 13.22 crore equity shares of Re1 each to the shareholders of LKB.
These shares would be issued in the ratio of seven equity shares of Re1 each of Centurion Bank of Punjab for every five equity shares of Rs10 each held by them in Lord Krishna Bank Ltd on the record date to be fixed for this purpose.
All branches of LKB would function as branches of CBoP with effect from tomorrow.
RBI’s decision follows dismissal of a petition against the merger by the Kerala High Court.
Shareholders of LKB at its annual general meeting on 30 September 2006 had approved the merger. However, one of the shareholders, Umeshkumar Pai, had challenged the merger and had sought an investigation into the affairs of LKB, arguing that the decision was taken without sufficient discussion and many shareholders were not allowed to participate in the meeting.