Assignment

Of

Current Affairs

Merger and Acquisition

Submitted To- Submitted By-

Mr. Anoop Mohanty Simarjot Singh

RS38E1A31

B.com(prof.) 6th sem

Federal bank
Federal Bank is a major Indian commercial bank in the private sector, the Federal
Bank Limited provides various financial services in India. It generates deposit
products, such as savings bank accounts, current deposits, time deposits, and
recurring deposits. The company also provides loans, including term loans, cash
credits, overdrafts, loans repayable on demand, loans on bills discounted,
residential mortgages, and commercial real estate loans, as well as invests in
mortgage backed securities. It offers,

Depository services, credit cards, life insurance products in association with IDBI
Fortis, general insurance products in association with United India Insurance,
export credit insurance products in association with ECGC, cash-on-line express
cash remittance, and lock-box service for non-resident Indians in the United States.

The Federal Bank provides cash management services, merchant banking services,
e-shopping payment gateway, Bharat Sanchar Nigam Limited bill payment, online
LIC insurance payment, easy pay-online fee payment system services, online
railway reservation system, and online kiosks for customers.

The company offers its services through a range of delivery channels, including
Internet banking, mobile banking and alerts, branch banking, interconnected Visa-
enabled automated teller machine (ATM) network, email alerts, telephone banking,
and a centralized customer call centre with toll free number headquartered at
Aluva, Kochi, Kerala. As of July 2010 it had 708 branches and 751 ATMs around
the country.
Federal Bank Limited
Federal Towers
Aluva, 683 101
India
Phone: 91 48 4262 3620
Fax: 91 48 4262 2672

Index Membership: N/A

Sector: Financial

Industry: Money Center Banks

Full Time Employees: 7,896

Ganesh Bank of Kurundwad
Ganesh Bank had its headquarters at Kurundwad, Maharashtra. The bank had a
network of 32 branches and its operations were concentrated
in Sangli and Kolhapur in Maharashtra and Belgaum in Karnataka

Merger
In 2006, Federal Bank acquired Ganesh Bank of Kurundwad after the Reserve
Bank of India suspended the bank. Established in 1920, Ganesh Bank had its
headquarters at Kurundwad, Maharashtra. The bank had a network of 32 branches
and its operations were concentrated in Sangli and Kolhapur in Maharashatra
and Belgaum in Karnataka. Prior to the merger, Federal Bank had 20 branches in
Maharashtra.

In March 2008, Federal Bank entered into a joint venture with IDBI Bank and
Fortis Insurance International to form IDBI Fortis Life Insurance, of which Federal
Bank owns 26 percent. The company ended the year with over 300 Cr in premiums
as on 31 March 2009.

The Government of India had, on January 24, 2006, sanctioned the Scheme of
Amalgamation of The Ganesh Bank of Kurundwad Ltd. with The Federal Bank
Ltd. However, the implementation of the Scheme of Amalgamation had been
stayed in terms of the Bombay High Court orders dated January 27, 2006 and April
5, 2006 and the Supreme Court order dated May 1, 2006. The Supreme Court’s
order dated August 28, 2006 has brought into force the said Scheme of
Amalgamation.

Accordingly, the Government of India has today issued a notification bringing the
Scheme of Amalgamation of The Ganesh Bank of Kurundwad Ltd. with The
Federal Bank Ltd. into force with effect from September 2, 2006. All the branches
of The Ganesh Bank of Kurundwad Ltd. will function as branches of The Federal
Bank Ltd. with effect from this date.

Customers, including depositors of The Ganesh Bank of Kurundwad Ltd., will be

able to operate their accounts as customers of The Federal Bank Ltd. with effect
from September 2, 2006. The Federal Bank Ltd. is making necessary arrangements
to ensure that service, as usual, is provided to the customers of The Ganesh Bank
of Kurundwad Ltd.

Following are the main reasons:

 The bank has agreed to pay fully the depositors of Ganesh Bank, which has a gross NPA
of 18.04% and a net NPA of 8.32%.
 Ganesh Bank has a negative networth of Rs. 3.05 crore and a negative capital adequacy
of 5.83%
 Ganesh Bank’s total asset base was Rs 233 crore. Its deposits aggregated Rs 217.4 crore
and advances were Rs 105.7 crore. 
 .As per the order of the moratorium passed by the Centre, the bank has been allowed to
make payments of up to Rs 5,000 to depositors
 Payment between Rs 10 crore and Rs 15 crore for Ganesh Bank.

International business
Federal bank was opened his first overseas Representative Office at Abu Dhabi,
UAE.

Market share
The market share of Federal bank was around 360 to 370 in the current scenario. It
was categorized under the other banks.
Conclusion
This was a small merger in the Indian banking sector. The Ganesh bank of
kurundwad was a Maharashtra based bank which was trying to safeguard the
investors money. At that time, the private bank i.e., federal bank got permission
from RBI to merge Ganesh bank of Kurunwad with them. Ganesh bank was only
having 32 branches but this decision had helped federal bank as federal bank will
get the agriculture belt of Maharashtra. In the short run the federal bank did not
have any type of gain from the merger. This merger was very effective for the
federal bank in the long run. The federal bank capitalize the clients, which they
got from the Ganesh bank of Kurundwad in the agricultural sector of Maharashtra.