BoB
willing to take over BSB
Our Banking Bureau
22 October 2001
Mumbai: The Bank
of Baroda (BoB) has written to the RBI that it is willing to take
over the assets
and liabilities of the Benares State Bank (BSB). This, however, is
subject to the Deposit Insurance and Credit Guarantee Corporation
of India (DICGCI) releasing funds to bridge the gap between
realisable assets and liabilities of BSB.
On receiving clearance
from the RBI, BoB will appoint an auditor to undertake due
diligence of BSB. The auditors will list out all liabilities
excluding those of the shareholders. The liabilities would include
depositors’ money, payment towards employees and other
contingent liabilities.
The auditors will also
list the realisable assets of BSB. BoB has proposed that the
difference between these assets and liabilities will have to be
bridged by the DICGCI.
The
takeover of BSB will affect the balancesheet of BoB marginally.
The proposed takeover will bring down BoB’s capital adequacy by
just 0.2 per cent. As on 31 March 2001, BoB’s capital adequacy
ratio stood at 12.8 per cent, which is above the RBI stipulated
ratio of 9 per cent.
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