Sikkim Bank to be merged with Union Bank
Calcutta: The government has approved the Reserve Bank of India’s proposal for amalgamation of Sikkim Bank with the Union Bank of India. The amalgamation will take effect from 22 December. The RBI, in a press statement, said all the branches of Sikkim Bank will function as branches of the Union Bank of India.

Sikkim Bank is a non-scheduled bank registered in Gangtok, with Ratan Singh Chowdhury holding nearly 60 per cent of its equity through a non-banking financial company. It is  not covered by the Banking Regulation Act. The RBI had stepped in to stem what it found mismanagement in the bank, stripped the bank’s former chief executive officer of his powers and appointed its own nominees to run the bank. The bank’s shareholders and depositors have legally challenged the RBI’s action, including the proposal of amalgamation and the appointment of its nominees.

Reacting to the RBI action, Mr Chowdhury said it is illegal, and the matter is sub judice.
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Hubli-Dharwad bank’s application rejected
Mumbai: The Reserve Bank of India has rejected an application from the Hubli-Dharwad Urban Cooperative Bank of Dharwad, Karnataka, for a licence to carry on banking business. The bank cannot transact the business of banking and it will not be able to accept deposits from the public or allow withdrawals by cheque, draft order or other such instruments.
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GIC plans catastrophe bonds
Mumbai: The General Insurance Corporation of India is planning catastrophe bonds as an alternative to transferring risks through re-insurance. These bonds provide investors with a return in case there are no specified catastrophic events like cyclone. The investors will not run a risk on their principal investment. GIC intends to raise nearly Rs 2,000 crore from these bonds.  
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