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Wednesday, Aug 30, 2006

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LKB, Centurion Bank boards meet on Sept 4 to decide on merger

Our Bureau

Kochi , Aug. 29

On September 4, the boards of Lord Krishna Bank and Centurion Bank of Punjab will meet in Delhi to give a final decision on the merger proposal.

Both the boards will also assess the valuation and due diligence, which Deloitte Haskins and Sells and N M Raji are expected to complete by then. The valuation and due diligence of both the banks are progressing rapidly, senior bankers said.

Subject to the due diligence and valuation, both the boards would also decide on a share-swap ratio, most probably on the same day.

Once the swap ratios are finalised, the banks will hold their AGM before September 30.

This is a statutory requirement, since the AGM has to pass the audited statement of accounts for the year, within six months. Both the AGMs are likely to take up the question of the share swap ratio and proposed merger, the sources said.

After the approval from the respective boards and the AGM, it is just matter of getting the regulatory approvals, which should be forthcoming in another couple of months.

Regarding the apprehensions and protest by a section of the staff against the merger, Mr B. Swaminathan, Managing Director and CEO of LKB, said the bank's employees have reason to be happy since the salary structure in Centurion Bank of Punjab is almost 30-40 per cent higher than those existing in LKB.

Though the merged entity will take a final call on the salary structure, he was confident that the staff would definitely get a higher pay package.

Regarding allegations that rural branches of LKB would be closed he said there has been no history of Centurion Bank of Punjab closing any branches. Even otherwise, he ruled out closure of branches saying that such closure was an onerous task, requiring prior permission of the Government and the RBI.

Citing the instance of the merger of Bank of Punjab with Centurion Bank, he said retrenchment has also not been a policy followed by the bank.

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