The share swap ratio is set at 9:4 or nine shares of Centurion Bank of face value of Re 1 for every four shares of BoP with a face value of Rs 10.
The bank informed the Bombay Stock Exchange that the scheme of amalgamation has been approved by the RBI on September 24. The scheme shall be effective from October 01, 2005, the bank said.
Pursuant to the merger scheme, Centurion Bank will issue 23,62,50,000 equity shares of Re 1 each to shareholders of Bank of Punjab Ltd in the ratio of nine equity shares of Re 1 each of the Bank for every four equity shares of Rs 10 each held by them in Bank of Punjab Ltd, it said.
Earlier, the board of directors of the two banks approved the merger scheme. The new entity would be called Centurion Bank of Punjab. With the merger, Centurion Bank will have greater presence in North India and doubling its assets. The merger will synergise the operations of the two banks as Bank of Punjab will overcome the problems it was facing in hiking its capital while Centurion Bank finds an avenue to utilise excess capital.
Centurion Bank's capital adequacy ratio rose to 20 per cent after the Bank raised about $72 million dollars or Rs 43 crore (Rs 430 million) through a GDR issue listed in Luxemburg bourse.
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