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ICICI and Sangli Bank merger approved

The proposed merger of Sangli Bank with India's largest lender ICICI Bank has been approved by the Indian banking regulatory body.

Following the green light from The Reserve Bank of India (RBI) the two banks' merger will be effective as of today.

Under the terms of the deal ICICI will acquire Sangli's 190 existing retail branches which are expected to form the basis of its plans to introduce a set of banking products and services aimed at small and medium-sized enterprises.

Meanwhile, ICICI is now expected to issue 3.46 million equity shares at 23 cents each against Sangli's 31.96 million, which are also at 23 cents each.

The merger had initially been approved by ICICI's shareholders in January this year.

ICICI, which was formerly the Industrial Credit and Investment Corporation of India, has a market capitalisation of £56 billion and operates 619 offices and branches throughout India.