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MUMBAI, Nov. 16

SHAREHOLDERS of Nedungadi Bank Ltd (NBL) will not be allotted shares of Punjab National Bank (PNB) after the amalgamation of NBL with PNB.

The Reserve Bank of India today officially stated that "the draft scheme of amalgamation of the two banks does not envisage allotment of shares of Punjab National Bank to the shareholders of Nedungadi Bank Ltd".

Subsequently, the Securities and Exchange Board of India (SEBI) said that the proposed merger of NBL with Punjab National bank is exempted from the applicability of Regulations 10,11 and 12 of the takeover regulations and hence, there would not be any public announcement or open offer for acquisition of shares of NBL by PNB.

In view of the press reports regarding the movement of share prices of Nedungadi Bank, the Reserve Bank clarified that under the draft scheme, "the entire amount of the paid-up capital and reserves of Nedungadi Bank Ltd would be treated as provision for bad and doubtful debts and depreciation and other assets of the bank''.

Following the announcement of the draft scheme of amalgamation of the two banks on November 13, 2002, the share price of Nedungadi Bank has been steadily rising with heavy volumes being traded in it.

The share price of Nedungadi Bank appreciated by over 20 per cent since November 13. Yesterday, the stock closed higher by 15.79 per cent on the BSE at Rs 17.85 with 25,569 shares being traded.

On the NSE, it fell by 2.81 per cent to close at Rs 27.70 with 2,935 shares changing hands.

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