IDBI Bank
Encyclopedia
The IDBI Bank Limited is one of India
's leading public sector banks and 4th largest Bank in overall ratings. RBI categorised IDBI as an "other public sector bank". It was established in 1964 by an Act of Parliament
to provide credit and other facilities for the development of the fledgling Indian industry. It is currently 10th largest development bank in the world in terms of reach with 1512 ATMs, 909 branches including one overseas branch at DIFC, Dubai and 621 centers including two overseas centres at Singapore & Beijing. Some of the institutions built by IDBI are the National Stock Exchange of India
(NSE), the National Securities Depository Services Ltd (NSDL), the Stock Holding Corporation of India (SHCIL), the Credit Analysis & Research Ltd, the Export-Import Bank of India(Exim Bank), the Small Industries Development Bank of India(SIDBI), the Entrepreneurship Development Institute of India
, and IDBI BANK, which is owned by the Indian Government.IDBI Bank is on a par with nationalized banks and the SBI Group as far as government ownership is concerned.It is one among the 26 commercial banks owned by the Government of India.The Bank has an aggregate balance sheet size of Rs. 2,53,378 crore as on March 31, 2011. IDBI Bank's operations during the financial year ended March 31,
(RBI) issued the requisite notification on 30 September 2004 incorporating IDBI as a 'scheduled bank' under the RBI Act, 1934. Consequently, IDBI, formally entered the portals of banking business as IDBIL from 1 October 2004.
The commercial banking arm, IDBI BANK, was merged into IDBI.
In March 2008, IDBI Bank entered into a joint venture with Federal Bank and Fortis Insurance International to form IDBI Fortis Life Insurance, of which IDBI Bank owns 48 percent. The company ended the year with over 300 Cr in premiums as on 31 March 2009.The name of IDBI Fortis Life Insurance is now changed to IDBI Federal Life Insurance Co Ltd.
Government of India now owns 65.17% stake in IDBI Bank. Hence IDBI Bank is also referred as 'The New Age Government owned Bank'
It has bought 10% stake in upcoming commodity bourse Universal Commo-dity Exchange (UCX) for Rs 10 crore, the bank's top official said. The deal was completed recently. RM Malla, chairman and MD of IDBI Bank, confirmed that the bank had picked up 10% in what will become the country's sixth commodity futures exchange. "The idea behind acquiring equity is to push agriculture loans through this venture," said Malla. "The other advantage is IDBI will be the only bank among the promoters and therefore all transactions of the exchange will be routed through IDBI."
A breakthrough initiative in customer service was taken by IDBI Bank (branded as 'Customer Delight Campaignhttp://www.dnaindia.com/money/interview_we-want-to-pay-higher-rate-to-depositors-charge-the-lowest-from-borrowers_1504749' when it removed many of the charges from its retail banking services. This step has created a wave in banking industry and put the bank on a developmental pedestal never seen before. Some of the charges waived are- ATM-cum-Debit card annual charges, Transaction charges on other banks' ATMs, Demand Draft/Pay Order charges, RTGS/NEFT charges, Cheque book issuance and utilization charges and many more other charges.
It was the winner in two categories in Dun & Bradstreet's Polaris Software Banking Awards 2011.
It has recently inaugurated its 909th Branch
at Ranikhet
, Uttrakhand. It has now a network of 909 branches, 621 centres and 1512 ATMs
as on October
13, 2011.
in 1930s. The demand for reconstruction funds for the affected nations compelled in setting up a worldwide institution for reconstruction. As a result the IBRD was set up in 1945 as a worldwide institution for development and reconstruction. This concept has been widened all over the world and resulted in setting up of large number of banks around the world which coordinating the developmental activities of different nations with different objectives among the world. The Narashimam committee had recommended to give up its direct financing functions and to perform only the promotional and refinancing role. However, the S.H.Khan committee, appointed by the RBI, recommended its transformation into a universal bank.
The course of development of financial institutions and markets during the post-Independence period was largely guided by the process of planned development pursued in India with emphasis on mobilisation of savings and channeling investment to meet Plan priorities. At the time of Independence in 1947, India had a fairly well developed banking system. The adoption of bank dominated financial development strategy was aimed at meeting the sectoral credit needs, particularly of agriculture and industry. Towards this end, the Reserve Bank
concentrated on regulating and developing mechanisms for institution building. The commercial banking network was expanded to cater to the requirements of general banking and for meeting the short-term working capital requirements of industry and agriculture. Specialised development financial institutions (DFIs) such as the IDBI, NABARD, NHB and SIDBI, etc., with majority ownership of the Reserve Bank were set up to meet the long-term financing requirements of industry and agriculture. To facilitate the growth of these institutions, a mechanism to provide concessional finance to these institutions was also put in place by the Reserve Bank.
The first development bank In India incorporated immediately after independence in 1948 under the Industrial Finance Corporation Act as a statutory corporation to pioneer institutional credit to medium and large-scale. Then after in regular intervals the government started new and different development financial institutions to attain the different objectives and helpful to five-year plans.
The early history of Indian banking and finance was marked by strong governmental regulation and control. The roots of the national system were in the State Bank of India Act of 1955, which nationalized the former Imperial Bank of India and its seven associate banks. In the early days, this national system operated alongside of a large private banking system. Banks were limited in their operational flexibility by the government’s desire to maintain employment in the banking system and were often drawn into troublesome loans in order to further the government’s social goals.
The financial institutions in India were set up under the strong control of both central and state Governments, and the Government utilized these institutions for the achievements in planning and development of the nation as a whole. Thus India financial institutions can be classified under five heads according to their economic importance:
Bold text
IDBI has played a pioneering role, particularly in the pre-reform era (1964–91),in catalyzing broad based industrial development in the country in keeping with its Government-ordained ‘development banking’ charter.
Narasimam committee recommends that IDBI should give up its direct financing functions and concentrate only in promotional and refinancing role. But this recommendation was rejected by the government. Later RBI constituted a committee under the chairmanship of S.H.Khan to examine the concept of development financing in the changed global challenges. This committee is the first to recommend the concept of universal banking. The committee wanted the development financial institution to diversify its activity. It recommended to harmonise the role of development financing and banking activities by getting away from the conventional distinction between commercial banking and developmental banking.
In September 2003, IDBI diversified its business domain further by acquiring the entire shareholding of Tata Finance Limited in Tata Home finance Ltd., signaling IDBI’s foray into the retail finance sector. The fully owned housing finance subsidiary has since been renamed ‘IDBI Home finance Limited’. In view of the signal changes in the operating environment, following initiation of reforms since the early nineties, Government of India has decided to transform IDBI into a commercial bank without eschewing its secular development finance obligations. The migration to the new business model of commercial banking, with its gateway to low-cost current, savings bank deposits, would help overcome most of the limitations of the current business model of development finance while simultaneously enabling it to diversify its client/ asset base. Towards this end, the IDB (Transfer of Undertaking and Repeal) Act 2003 was passed by Parliament in December 2003. The Act provides for repeal of IDBI Act, corporatisation of IDBI (with majority Government holding; current share: 58.47%) and transformation into a commercial bank. The provisions of the Act have come into force from 2 July 2004 in terms of a Government Notification to this effect. The Notification facilitated formation, incorporation and registration of Industrial Development Bank of India Ltd. as a company under the Companies Act, 1956 and a deemed Banking Company under the Banking Regulation Act 1949 and helped in obtaining requisite regulatory and statutory clearances, including those from RBI. IDBI would commence banking business in accordance with the provisions of the new Act in addition to the business being transacted under IDBI Act, 1964 from 1 October 2004, the ‘Appointed Date’ notified by the Central Government.
IDBI Bank, with which the parent IDBI was merged, was a new generation Bank. The Pvt Bank was the fastest growing banking company in India. The bank was pioneer in adapting to policy of first mover in tier 2 cities. The Bank has one of the highest productivity per employee in Indian banking industry.
On 29 July 2004, the Board of Directors of IDBI and IDBI Bank accorded in principle approval to the merger of IDBI Bank with the Industrial Development Bank of India Ltd. to be formed incorporated under the Companies Act, 1956 pursuant to the IDB (Transfer of Undertaking and Repeal) Act, 2003 (53 of 2003), subject to the approval of shareholders and other regulatory and statutory approvals. A mutually gainful proposition with positive implications for all stakeholders and clients, the merger process is expected to be completed during the current financial year ending 31 March 2005.
The immediate fall out of the merger of IDBI and IDBI Bank was the exit of employees of IDBI bank. The cultures in the two organizations have taken its toll. The IDBI Bank now is in a growing fold. With its retail banking arm expanding further after the merger of United western Bank.
IDBI would continue to provide the extant products and services as part of its development finance role even after its conversion into a banking company. In addition, the new entity would also provide an array of wholesale and retail banking products, designed to suit the specific needs cash flow requirements of corporates and individuals. In particular, IDBI would leverage the strong corporate relationships built up over the years to offer customised and total financial solution
s for all corporate business needs, single-window appraisal for term loans and working capital finance, strategic advisory and “hand-holding” support at the implementation phase of projects, among others.
IDBI’s transformation into a commercial bank would provide a gateway to low-cost deposits like Current and Savings Bank Deposits. This would have a positive impact on the Bank’s overall cost of funds and facilitate lending at more competitive rates to its clients. The new entity would offer various retail products, leveraging upon its existing relationship with retail investors under its existing Suvidha Flexi-bond schemes.
The responsibility for maintaining standards of corporate governance lies with its Board of Directors. Two Committees of the Board viz. the Executive Committee and the Audit Committee are adequately empowered to monitor implementation of good corporate governance practices and making necessary disclosures within the framework of legal provisions and banking conventions.
In view of certain structural and financial problems adversely impacting its long-term viability, IIBI submitted a financial restructuring proposal to the Government of India on 25 July 2003. IIBI has since received certain directives from the Government of India, which, inter alias, include restricting fresh lending to existing clients approved cases rated corporates, restrictions on fresh borrowings, an action plan to reduce the overhead expenditure, disposal of fixed assets and a time-bound plan for asset recovery/reconstruction. The Government of India had also given its approval for the merger of IIBI with IDBI and the latter had already started the due diligence process.
But on 17 December 2005 the IDBI rejected any such merger.
, in Maharashtra
State. It became a Scheduled Bank in 1951. In 1956 it merged with Union Bank of Kolhapur, and in 1961 with Satara Swadeshi Commercial Bank. At the time of the merger with IDBI, United Western had some 230 branches spread over 47 districts in 9 states, controlled by five Zonal Offices at Mumbai
, Pune
, Kolhapur, Jalgaon and Nagpur
.
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
's leading public sector banks and 4th largest Bank in overall ratings. RBI categorised IDBI as an "other public sector bank". It was established in 1964 by an Act of Parliament
Act of Parliament
An Act of Parliament is a statute enacted as primary legislation by a national or sub-national parliament. In the Republic of Ireland the term Act of the Oireachtas is used, and in the United States the term Act of Congress is used.In Commonwealth countries, the term is used both in a narrow...
to provide credit and other facilities for the development of the fledgling Indian industry. It is currently 10th largest development bank in the world in terms of reach with 1512 ATMs, 909 branches including one overseas branch at DIFC, Dubai and 621 centers including two overseas centres at Singapore & Beijing. Some of the institutions built by IDBI are the National Stock Exchange of India
National Stock Exchange of India
The National Stock Exchange is a stock exchange located at Mumbai, Maharashtra, India. It is the 9th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization...
(NSE), the National Securities Depository Services Ltd (NSDL), the Stock Holding Corporation of India (SHCIL), the Credit Analysis & Research Ltd, the Export-Import Bank of India(Exim Bank), the Small Industries Development Bank of India(SIDBI), the Entrepreneurship Development Institute of India
Entrepreneurship Development Institute of India
The Entrepreneurship Development Institute of India , an autonomous and not-for-profit Institute, set up in 1983, is sponsored by apex financial institutions - the IDBI Bank Ltd., IFCI Ltd., ICICI Bank Ltd. and State Bank of India...
, and IDBI BANK, which is owned by the Indian Government.IDBI Bank is on a par with nationalized banks and the SBI Group as far as government ownership is concerned.It is one among the 26 commercial banks owned by the Government of India.The Bank has an aggregate balance sheet size of Rs. 2,53,378 crore as on March 31, 2011. IDBI Bank's operations during the financial year ended March 31,
Recent developments
To meet emerging challenges and to keep up with reforms in financial sector, IDBI has taken steps to reshape its role from a development finance institution to a commercial institution. With the Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003, IDBI attained the status of a limited company viz. "Industrial Development Bank of India Limited" (IDBIL). Subsequently, the Reserve Bank of IndiaReserve Bank of India
The Reserve Bank of India is the central banking institution of India and controls the monetary policy of the rupee as well as US$300.21 billion of currency reserves. The institution was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of...
(RBI) issued the requisite notification on 30 September 2004 incorporating IDBI as a 'scheduled bank' under the RBI Act, 1934. Consequently, IDBI, formally entered the portals of banking business as IDBIL from 1 October 2004.
The commercial banking arm, IDBI BANK, was merged into IDBI.
In March 2008, IDBI Bank entered into a joint venture with Federal Bank and Fortis Insurance International to form IDBI Fortis Life Insurance, of which IDBI Bank owns 48 percent. The company ended the year with over 300 Cr in premiums as on 31 March 2009.The name of IDBI Fortis Life Insurance is now changed to IDBI Federal Life Insurance Co Ltd.
Government of India now owns 65.17% stake in IDBI Bank. Hence IDBI Bank is also referred as 'The New Age Government owned Bank'
It has bought 10% stake in upcoming commodity bourse Universal Commo-dity Exchange (UCX) for Rs 10 crore, the bank's top official said. The deal was completed recently. RM Malla, chairman and MD of IDBI Bank, confirmed that the bank had picked up 10% in what will become the country's sixth commodity futures exchange. "The idea behind acquiring equity is to push agriculture loans through this venture," said Malla. "The other advantage is IDBI will be the only bank among the promoters and therefore all transactions of the exchange will be routed through IDBI."
A breakthrough initiative in customer service was taken by IDBI Bank (branded as 'Customer Delight Campaignhttp://www.dnaindia.com/money/interview_we-want-to-pay-higher-rate-to-depositors-charge-the-lowest-from-borrowers_1504749' when it removed many of the charges from its retail banking services. This step has created a wave in banking industry and put the bank on a developmental pedestal never seen before. Some of the charges waived are- ATM-cum-Debit card annual charges, Transaction charges on other banks' ATMs, Demand Draft/Pay Order charges, RTGS/NEFT charges, Cheque book issuance and utilization charges and many more other charges.
It was the winner in two categories in Dun & Bradstreet's Polaris Software Banking Awards 2011.
It has recently inaugurated its 909th Branch
Branch
A branch or tree branch is a woody structural member connected to but not part of the central trunk of a tree...
at Ranikhet
Ranikhet
Ranikhet is a hill station and cantonment town in Almora district in the Indian state of Uttarakhand. It is the home for the Military Hospital, Kumaon Regiment & Naga Regiment and is maintained by the Indian Army....
, Uttrakhand. It has now a network of 909 branches, 621 centres and 1512 ATMs
Automated teller machine
An automated teller machine or automatic teller machine, also known as a Cashpoint , cash machine or sometimes a hole in the wall in British English, is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public...
as on October
October
October is the tenth month of the year in the Julian and Gregorian Calendars and one of seven months with a length of 31 days. The eighth month in the old Roman calendar, October retained its name after January and February were inserted into the calendar that had originally been created by the...
13, 2011.
Overview of development banking in India
The concept of development banking rose only after Second World War, after the Great DepressionGreat Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
in 1930s. The demand for reconstruction funds for the affected nations compelled in setting up a worldwide institution for reconstruction. As a result the IBRD was set up in 1945 as a worldwide institution for development and reconstruction. This concept has been widened all over the world and resulted in setting up of large number of banks around the world which coordinating the developmental activities of different nations with different objectives among the world. The Narashimam committee had recommended to give up its direct financing functions and to perform only the promotional and refinancing role. However, the S.H.Khan committee, appointed by the RBI, recommended its transformation into a universal bank.
The course of development of financial institutions and markets during the post-Independence period was largely guided by the process of planned development pursued in India with emphasis on mobilisation of savings and channeling investment to meet Plan priorities. At the time of Independence in 1947, India had a fairly well developed banking system. The adoption of bank dominated financial development strategy was aimed at meeting the sectoral credit needs, particularly of agriculture and industry. Towards this end, the Reserve Bank
Reserve Bank of India
The Reserve Bank of India is the central banking institution of India and controls the monetary policy of the rupee as well as US$300.21 billion of currency reserves. The institution was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of...
concentrated on regulating and developing mechanisms for institution building. The commercial banking network was expanded to cater to the requirements of general banking and for meeting the short-term working capital requirements of industry and agriculture. Specialised development financial institutions (DFIs) such as the IDBI, NABARD, NHB and SIDBI, etc., with majority ownership of the Reserve Bank were set up to meet the long-term financing requirements of industry and agriculture. To facilitate the growth of these institutions, a mechanism to provide concessional finance to these institutions was also put in place by the Reserve Bank.
The first development bank In India incorporated immediately after independence in 1948 under the Industrial Finance Corporation Act as a statutory corporation to pioneer institutional credit to medium and large-scale. Then after in regular intervals the government started new and different development financial institutions to attain the different objectives and helpful to five-year plans.
The early history of Indian banking and finance was marked by strong governmental regulation and control. The roots of the national system were in the State Bank of India Act of 1955, which nationalized the former Imperial Bank of India and its seven associate banks. In the early days, this national system operated alongside of a large private banking system. Banks were limited in their operational flexibility by the government’s desire to maintain employment in the banking system and were often drawn into troublesome loans in order to further the government’s social goals.
The financial institutions in India were set up under the strong control of both central and state Governments, and the Government utilized these institutions for the achievements in planning and development of the nation as a whole. Thus India financial institutions can be classified under five heads according to their economic importance:
- All-India Development Banks
- Specialized Financial Institutions
- Investment Institutions
- State-level institutions
- Other institutions..
Bold text
Industrial Development Bank of India (IDBI)
The Industrial Development Bank of India (IDBI) was established on 1 July 1964 under an Act of Parliament as a wholly owned subsidiary of the Reserve Bank of India. In 16 February 1976, the ownership of IDBI was transferred to the Government of India and it was made the principal financial institution for coordinating the activities of institutions engaged in financing, promoting and developing industry in the country. Although Government shareholding in the Bank came down below 100% following IDBI’s public issue in July 1995, the former continues to be the major shareholder (current shareholding: 65.14%). IDBI provides financial assistance, both in rupee and foreign currencies, for green-field projects as also for expansion, modernisation and diversification purposes. In the wake of financial sector reforms unveiled by the government since 1992, IDBI also provides indirect financial assistance by way of refinancing of loans extended by State-level financial institutions and banks and by way of rediscounting of bills of exchange arising out of sale of indigenous machinery on deferred payment terms.IDBI has played a pioneering role, particularly in the pre-reform era (1964–91),in catalyzing broad based industrial development in the country in keeping with its Government-ordained ‘development banking’ charter.
Narasimam committee recommends that IDBI should give up its direct financing functions and concentrate only in promotional and refinancing role. But this recommendation was rejected by the government. Later RBI constituted a committee under the chairmanship of S.H.Khan to examine the concept of development financing in the changed global challenges. This committee is the first to recommend the concept of universal banking. The committee wanted the development financial institution to diversify its activity. It recommended to harmonise the role of development financing and banking activities by getting away from the conventional distinction between commercial banking and developmental banking.
In September 2003, IDBI diversified its business domain further by acquiring the entire shareholding of Tata Finance Limited in Tata Home finance Ltd., signaling IDBI’s foray into the retail finance sector. The fully owned housing finance subsidiary has since been renamed ‘IDBI Home finance Limited’. In view of the signal changes in the operating environment, following initiation of reforms since the early nineties, Government of India has decided to transform IDBI into a commercial bank without eschewing its secular development finance obligations. The migration to the new business model of commercial banking, with its gateway to low-cost current, savings bank deposits, would help overcome most of the limitations of the current business model of development finance while simultaneously enabling it to diversify its client/ asset base. Towards this end, the IDB (Transfer of Undertaking and Repeal) Act 2003 was passed by Parliament in December 2003. The Act provides for repeal of IDBI Act, corporatisation of IDBI (with majority Government holding; current share: 58.47%) and transformation into a commercial bank. The provisions of the Act have come into force from 2 July 2004 in terms of a Government Notification to this effect. The Notification facilitated formation, incorporation and registration of Industrial Development Bank of India Ltd. as a company under the Companies Act, 1956 and a deemed Banking Company under the Banking Regulation Act 1949 and helped in obtaining requisite regulatory and statutory clearances, including those from RBI. IDBI would commence banking business in accordance with the provisions of the new Act in addition to the business being transacted under IDBI Act, 1964 from 1 October 2004, the ‘Appointed Date’ notified by the Central Government.
IDBI Bank, with which the parent IDBI was merged, was a new generation Bank. The Pvt Bank was the fastest growing banking company in India. The bank was pioneer in adapting to policy of first mover in tier 2 cities. The Bank has one of the highest productivity per employee in Indian banking industry.
On 29 July 2004, the Board of Directors of IDBI and IDBI Bank accorded in principle approval to the merger of IDBI Bank with the Industrial Development Bank of India Ltd. to be formed incorporated under the Companies Act, 1956 pursuant to the IDB (Transfer of Undertaking and Repeal) Act, 2003 (53 of 2003), subject to the approval of shareholders and other regulatory and statutory approvals. A mutually gainful proposition with positive implications for all stakeholders and clients, the merger process is expected to be completed during the current financial year ending 31 March 2005.
The immediate fall out of the merger of IDBI and IDBI Bank was the exit of employees of IDBI bank. The cultures in the two organizations have taken its toll. The IDBI Bank now is in a growing fold. With its retail banking arm expanding further after the merger of United western Bank.
IDBI would continue to provide the extant products and services as part of its development finance role even after its conversion into a banking company. In addition, the new entity would also provide an array of wholesale and retail banking products, designed to suit the specific needs cash flow requirements of corporates and individuals. In particular, IDBI would leverage the strong corporate relationships built up over the years to offer customised and total financial solution
Solution
In chemistry, a solution is a homogeneous mixture composed of only one phase. In such a mixture, a solute is dissolved in another substance, known as a solvent. The solvent does the dissolving.- Types of solutions :...
s for all corporate business needs, single-window appraisal for term loans and working capital finance, strategic advisory and “hand-holding” support at the implementation phase of projects, among others.
IDBI’s transformation into a commercial bank would provide a gateway to low-cost deposits like Current and Savings Bank Deposits. This would have a positive impact on the Bank’s overall cost of funds and facilitate lending at more competitive rates to its clients. The new entity would offer various retail products, leveraging upon its existing relationship with retail investors under its existing Suvidha Flexi-bond schemes.
The responsibility for maintaining standards of corporate governance lies with its Board of Directors. Two Committees of the Board viz. the Executive Committee and the Audit Committee are adequately empowered to monitor implementation of good corporate governance practices and making necessary disclosures within the framework of legal provisions and banking conventions.
Industrial Investment Bank of India Ltd.
The industrial investment bank of India is one of oldest banks in India. The Industrial Reconstruction Corporation of India Ltd., set up in 1971 for rehabilitation of sick industrial companies, was reconstituted as Industrial Reconstruction Bank of India in 1985 under the IRBI Act, 1984. With a view to converting the institution into a full-fledged development financial institution, IRBI was incorporated under the Companies Act, 1956, as Industrial Investment Bank of India Ltd. (IIBI) in March 1997. IIBI offers a wide range of products and services, including term loan assistance for project finance, short duration non-project asset-backed financing, working capital/ other short-term loans to companies, equity subscription, asset credit, equipment finance as also investments in capital market and money market instruments.In view of certain structural and financial problems adversely impacting its long-term viability, IIBI submitted a financial restructuring proposal to the Government of India on 25 July 2003. IIBI has since received certain directives from the Government of India, which, inter alias, include restricting fresh lending to existing clients approved cases rated corporates, restrictions on fresh borrowings, an action plan to reduce the overhead expenditure, disposal of fixed assets and a time-bound plan for asset recovery/reconstruction. The Government of India had also given its approval for the merger of IIBI with IDBI and the latter had already started the due diligence process.
But on 17 December 2005 the IDBI rejected any such merger.
Acquisition of United Western Bank
In 2006, IDBI Bank acquired United Western Bank in a rescue. Annasaheb Chirmule, who worked for the cause of Swadeshi movement, founded Satara Swadeshi Commercial Bank in 1907, and some three decades later founded United Western Bank. The bank was incorporated in 1936, and commenced operations the next year, with its head office in SataraSatara
Satara is a city located in the Satara District of Maharashtra state of India. The town is 2320 ft. above sea-level, near the confluence of the Krishna and its tributary river Venna. The city was the capital of the Maratha empire in the 17th century, hence one of the the historical cities of...
, in Maharashtra
Maharashtra
Maharashtra is a state located in India. It is the second most populous after Uttar Pradesh and third largest state by area in India...
State. It became a Scheduled Bank in 1951. In 1956 it merged with Union Bank of Kolhapur, and in 1961 with Satara Swadeshi Commercial Bank. At the time of the merger with IDBI, United Western had some 230 branches spread over 47 districts in 9 states, controlled by five Zonal Offices at Mumbai
Mumbai
Mumbai , formerly known as Bombay in English, is the capital of the Indian state of Maharashtra. It is the most populous city in India, and the fourth most populous city in the world, with a total metropolitan area population of approximately 20.5 million...
, Pune
Pune
Pune , is the eighth largest metropolis in India, the second largest in the state of Maharashtra after Mumbai, and the largest city in the Western Ghats. Once the centre of power of the Maratha Empire, it is situated 560 metres above sea level on the Deccan plateau at the confluence of the Mula ...
, Kolhapur, Jalgaon and Nagpur
Nagpur
Nāgpur is a city and winter capital of the state of Maharashtra, the largest city in central India and third largest city in Maharashtra after Mumbai and Pune...
.