Sign In / Register
Make This My Home Page | Feedback |RSS
You are here: IE »   Story

All the bidders for a troubled bank

  • Print
  • Mail This Article
  • Comments
  • Add to favorites
  • Sucheta Dalal

    The list of suitors is so long that it seems set to bury important questions such as why the RBI did nothing as the bank kept piling on bad loans and a former investment banker tried to acquire the bank, probably on behalf of an industrialist. The capital market regulator and stock exchanges also failed to prevent brazen price manipulation for almost a year that allowed UWB to price its recent rights issue at a premium even when losses were mounting.

    All this does not augur well for the process of selecting a sensible acquirer who would do well by all the bank’s stakeholders. In fact, it points to the likelihood of political interference. Otherwise, UWB’s acquirer is most likely to be decided by a process of elimination.

    For starters, there is enormous pressure to eliminate all banks that have been penalised in the IPO allotment scandal and are not allowed to open new branches. In fact, they triggered the initial rush of suitors for UWB since the winner could hope to for a sudden, 230-branch expansion with a strong presence in rural Maharashtra.

    Ads by Google

    The RBI’s alleged decision to punish banks by barring them from opening new branches itself needs some discussion. One uses the word ‘alleged’ because banks deny media reports about the three-year ban, while the RBI is officially silent on the issue. It is indeed a fact that these banks have not been allowed to expand for almost a year and no permissions are on the horizon either.

    ... contd.

    PreviousNext1234
    Comments
    Post comment

    Be the first to comment.

    Post a Comment
    Name:
    Email:
    Title:
    Maximum characters allowed     
    Comment:
    TERMS OF USE:
    The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).
    I agree to the terms of use.