The race to take over failed United Western Bank took an interesting turn today with the failed bank’s board clearing a restructuring scheme.

But with over 22-lakh depositors now waiting for the bank’s merger with a stronger one so that they can access their money, the banking regulator is cool to the UWB board’s proposal.

The United Western board will forward a scheme of reconstruction to the RBI in association with its 10% equity holder, Sicom, with a commitment to bring in Rs 350 crore to meet all liabilities, achieve adequate capital and the net worth requirements. The bank will file an expression of interest to the RBI by Friday.

But the RBI officials say that the bank’s move is too late in the day. “They (members) should have shown some interest when the bank was going down and it was making losses,” a RBI official said wishing not to be quoted. Barring a red flag from the RBI’s nominee on the UWB board, other boardmembers were not active in the last two years to report any wrongdoings to the regulator, he adds.

What is adding to the RBI’s confidence to get a suitable partner is the rush among other Indian banks — both private and public — to take over the bank. On Wednesday, Bank of Maharashtra and Mangalore-based Corporation Bank said they are also interested in taking over the bank. With this, the total takeover proposals have reached sixteen from UWB’s competitors.

RBI says as United Western Bank has high potential to turn around and make profits again, hence there is a lot of interest among the bidders. It will now study all the EoIs and take a decision within the next few weeks.

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