The bride gets the groom. The Bank of Punjab
looking for a perfect groom to clean up its
account and the Centurion Bank in search of
business have finally agreed to merge. The wedding
has been a great news for the Bank of Punjab
shareholders and a good news for Centurion Bank
as well. After the merger of Bank of Punjab with the
Centurion Bank, the new bank will be called “Centurion Bank of Punjab”.
The two ‘new
generation’ private banks have been looking for
ways to increase the paid up capital to Rs. 3000 mn
as per Reserve Bank of India (RBI) guidelines.
After the amalgamation, Guruvinder Singh
Rana Talwar who is the Chairman of Centurion Bank
will continue to be the Chairman of the new bank
while Shailendra Bhandari, who is currently the
Managing Director (MD) of Centurion Bank, will
occupy the same position in the new bank. Tejbir Singh, the Executive Director of Bank of Punjab, will
become full time Executive Director in the new bank.
Speaking on the merger, the Chairman Rana Talwar said, ‘the combination of Centurion Bank and
Bank of Punjab will create one of the strongest full services banks in the country. Centurion Bank of
Punjab will build upon the power brands existing with both banks and the merger is a win-win for the
shareholders, customers and staff of the two banks. The merger is fit in terms of achieving scale and
geographic presence and after the regulatory approvals; there would be crossover of products and
services’.
S Dharshanjit Singh, former chairman and promoter of Bank of Punjab said, ‘the merger will add
value and the growth momentum of combined banks, result in multiplier effect and will produce
electrifying results. All the stockholders, including employees will benefit in the long run. And added
consolidation is the need of the hour’.
Shailendra Bhandari, the new MD of Centurion Bank of Punjab said, ‘the bank will have strong
capital adequacy ratio and will have the Non Performing Assets (NPAs) well under control.
He expressed
confidence that once it gets the nod from the RBI and approval from the shareholders meeting called
by the both Bank of Punjab and Centurion Bank, the new bank will be a force to reckon with’.
The deal, when finally approved by the RBI, will give the bank a combined network of 235
branches, and 382 ATMs with the net interest margin of 4.8%. The bank will have its combined assets
to the total of Rs. 93.95 bn, a net worth of Rs. 6960 mn and a paid up capital of Rs. 1300 mn.
Bank of Punjab (BoP) and Centurion Bank came into being when the first phase of banking
reforms took place in 1994. About nine ‘new generation banks’ came into being when RBI gave out
licenses to private players, when banking reforms were introduced in 1994. The basic idea behind
allowing private players was to introduce a set of non-legacy players to catalyze the banking industry
along with the Public Sector Banks (PSBs). The new nine banks, which have been given license
during the first phase of banking reforms, began to raise standards from day one. |
