RBI approves merger of ING Vysya with Kotak Mahindra
01 April 2015
The Reserve Bank of India has approved the merger between Kotak Mahindra Bank and ING Vysya Bank, which would create the country's fourth largest private sector lender.
Uday Kotak, executive vice-chairman and managing director of Kotak Group, announced the news of the merger of ING Vysya Bank with Kotak Mahindra Bank on Twitter.
"Happy to share that RBI has approved merger of ING Vysya Bank with Kotak Mahindra Bank effective April 1, 2015," Kotak posted on the micro blogging website.
''The Reserve Bank of India has sanctioned the Scheme of Amalgamation of ING Vysya Bank Ltd with Kotak Mahindra Bank Ltd. The Scheme has been sanctioned in exercise of the powers contained in Sub-section (4) of Section 44A of the Banking Regulation Act, 1949.
The Scheme will come into force with effect from April 1, 2015. All the branches of ING Vysya Bank Ltd will function as branches of Kotak Mahindra Bank Ltd with effect from April 1, 2015,'' RBI said in a brief statement on its web site.
The banks have already received approval from the Competition Commission of India (CCI) and now, with RBI approval the merged entity has now become operational.
In an order dated 12 February 2015, the CCI said the share of both entities in various relevant markets is "insignificant".
Kotak Mahindra Bank Ltd had, in November last year, announced the acquisition of local rival ING Vysya Bank Ltd, in which Dutch lender ING Groep NV owned about 43 per cent, in an all-stock deal worth over Rs15,000 crore ($2.4 billion). (See: Kotak Mahindra Bank to acquire ING Vysya Bank)
Under the share swap arrangement, ING shareholders got 725 Kotak Bank shares for every 1,000 shares they held.
Following the merger deal, all the tangible and intangible assets have been transferred to Kotak Mahindra Bank. The merged entity has now 1,214 branches, with a wide-spread pan-India network. ING Vysya had around 10,000 employees, while Kotak Bank had around 29,000 at the time of the announcement of the merger.
The merger makes Kotak the fourth-largest private bank in the country in terms of total business.