A host of Indian banks led by ICICI Bank and Canara Bank have jumped into the fray to take over United Western Bank following suspension of its banking operations by the Reserve Bank of India.

The boards of Andhra Bank, Allahabad Bank, Federal Bank, Standard Chartered Bank and Canara Bank gave green signals today to their managements to make bid for United Western which has about 22-lakh depositors and Rs 6,000 crore deposits, making it an attractive prey for takeover by other banks.

“ICICI Bank believes that UWB’s network can be leveraged to grow its rural and small and medium enterprise banking operations in particular and its overall distribution franchise in general,” ICICI said in a statement.

On Saturday, the RBI had imposed a moratorium on the United Western Bank’s operations citing mismanagement and high bad loans. United — which even lent money in the past to wilfull defualters — is struggling with a bad loan ratio running at 5.66 per cent, compared with its peers’ 1.97 per cent.

Apart from depositors, its investors also panicked following the RBI order. On Monday as soon as the stock markets opened, UWB’s shares plunged 33 per cent to Rs 15.15 on a huge volume of 82.04 lakh shares. The stock witnessed high volatility, plunging all the way to Rs 10. It also hit a high of Rs 18.05. The stock has been consistently declining, from Rs 45.35 on May 11 to Rs 22.55 by September 1, on sustained selling pressure.

The RBI had in the past merged Global Trust Bank with government-owned Oriental Bank of Commerce a few years back and Nedungadi Bank with Punjab National Bank.

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