TaxTMI 
TaxTMI 
Amalgamation of Private Sector Banks, Directions, 2016
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....registered with the RBI. b. The principles underlying these Directions would be applicable, as appropriate, to public sector banks. 3. Definitions (i) In these Directions, unless the context otherwise requires, the terms herein shall bear the meanings assigned to them below - a. "Private Sector Banks" means banks licensed to operate in India under Banking Regulation Act, 1949, other than Urban Co-operative Banks, Foreign Banks and banks licensed under specific Statutes. b. "Amalgamated Company" means the company which is proposed to transfer its business to another company under the scheme of amalgamation. c. "Amalgamating Company" means the company which is to acquire the business of the amalgamated company under the scheme of amalgamation. (ii) All other expressions unless defined herein shall have the same meaning as have been assigned to them under the Banking Regulation Act, 1949 or the Reserve Bank of India Act, 1934 or as used in commercial parlance, as the case may be. 4. Scope These guidelines shall cover the undernoted situations a. An amalgamation of two banking companies. b. An amalgamation of an NBFC ....
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....eing taken for unrealized gains. b. Whether due diligence exercise has been undertaken in respect of the amalgamated company. c. The nature of the consideration, which, the amalgamating company will pay to the shareholders of the amalgamated company. d. Whether the swap ratio has been determined by independent valuers having required competence and experience and whether in the opinion of the Board such swap ratio is fair and proper. e. The shareholding pattern in the two banking companies and whether as a result of the amalgamation and the swap ratio, the shareholding of any individual, entity or group in the amalgamating company will be violative of the Reserve Bank guidelines or require its specific approval. f. The impact of the amalgamation on the profitability and the capital adequacy ratio of the amalgamating company. g. The changes which are proposed to be made in the composition of the board of directors of the amalgamating banking company, consequent upon the amalgamation and whether the resultant composition of the Board will be in conformity with the Reserve Bank guidelines in that behalf. 10. In terms of Section ....
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....f NBFC, but before it is submitted to the Tribunal for approval. 15. When according its approval to the scheme, the Board of the banking company shall give consideration to the matters listed in paragraph 9, Chapter III above. 16. In addition, the Board shall examine whether: - a. The NBFC has violated / is likely to violate any of the RBI / SEBI norms and if so, shall ensure that these norms are complied with before the scheme of amalgamation is approved. b. The NBFC has complied with the "Know Your Customer" norms for all the accounts, which will become accounts of the banking company after amalgamation. c. If the NBFC has availed of credit facilities from banks / FIs, whether the loan agreements mandate the NBFC to seek consent of the bank / FI concerned for the proposed merger / amalgamation. CHAPTER - IV A PROCEDURE FOR APPLICATION FOR AMALGAMATION OF AN NBFC WITH A BANKING COMPANY 17. To enable the Reserve Bank of India to consider the application for approval, the banking company shall furnish to Reserve Bank of India information as specified in the Schedule to these Directions (excluding item 4) and also the information and document....
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....y them; e. The number of shareholders whose votes were declared as invalid and the aggregate number of shares held by them; f. The names and ledger folios of the shareholders who voted against the resolution and the number of shares held by each such shareholder; g. The names and designations of the scrutineers appointed for counting the votes at the meeting together with certificates from such scrutineers confirming the information given in items (c) to (f) above; h. The name of shareholders who have given notice in writing to the Presiding Officer that they dissented from the scheme of amalgamation together with the number of shares held by each of them. 4. Certificates from the concerned officers of the companies giving names of shareholders who have given notice in writing at or prior to the meeting to the banking company that they dissented from the scheme of amalgamation together with the number of shares held by each of them. 5. The names, addresses and occupations of the Directors of the amalgamating company as proposed to be reconstituted after the amalgamation and indicating how the composition will be in compliance with Reserve B....