Stock Holding Corporation of India (SHCIL), leading depository participant and largest custodian of securities in the country, will be merged with government-owned IDBI Bank.

SHCIL was incorporated as a public limited company in 1986. It was jointly promoted by leading banks and financial institutions, including IFCI, IDBI Bank, the Life Insurance Corporation and the General Insurance Corporation.

Valuation on

The boards of SHCIL and IDBI Bank have approved the merger. “It will be based on a share swap ratio, which, in turn, will be determined by valuation of both,” said B. K. Batra, Deputy Managing Director, IDBI Bank, while talking to The Hindu

The process is expected to be completed by March, 2013.

SHCIL is having custodial, depository participant, document storage, digitisation and broking business, which would be merged with IDBI Bank. “We hope that with this merger, IDBI Bank’s branch network would be increased by another 200-227 branches, and add another eight lakh customers, most of them are high networth individuals, mutual funds and foreign institutional investors to the bank’s 80 lakh customers at present,” said Mr. Batra.

The bank is now having 1,000 branches across the country. Mr. Batra said “We will be able to make use of state-of-the-art technology and infrastructure of SHCIL to sell banking services.” It will also improve the current and savings account (CASA) of the bank.

Major player

As no public sector bank is now offering custodial services, IDBI Bank will emerge as a major player in this segment of business in the country.

Mr. Batra said the broking services of SHCIL, which is a subsidiary known as SHCIL Services Ltd., would be merged with IDBI Capital Market Services.

“On the other hand, once the banking services will be added SHCIL customers will be benefited,” said Mr. Batra.

The shareholders also would be benefited by way of liquid stock of IDBI Bank.

“Our effort will be to absorb 1,300 trained workforce of SHCIL with us,” Mr. Batra added.

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