United Bank of India rallies over 10% on reports of merger with IDBI

NEW DELHI: United Bank of India rallied as much as 10.2 per cent in trade on Monday, after the government has set the ball rolling on merger of public sector banks, asking IDBI Bank and United Bank of India to prepare a consolidation plan.

This is, however, expected to be preceded by State Bank of India taking its subsidiary State Bank of Patiala into its fold, TNN said in a report over the weekend.

At 10:50 a.m.; United Bank of India pared some of the intraday gains but was still trading 6.4 per cent higher at Rs 52.15. It hit a low of Rs 51.70 and a high of Rs 54 in trade today.

IDBI was trading 0.6 per cent higher at Rs 90.75. It hit a low of Rs 90 and a high of Rs 91.55 in trade today.

While the finance ministry and state-run banks are looking at other merger options, work on these two proposals has already started, added the report quoting top-level government sources.

On June 4, TOI was the first to report that the government had begun consultations on consolidation of public sector banks.

There are 27 state-run banks in the country, including five SBI subsidiaries. The government is keen to bolster the weaker entities but has asked banks to prepare a blueprint keeping in mind human resource issues, geographical spread and technology platforms.