Mumbai: The Reserve Bank of India (RBI) and the Securities Exchange Board of India (SEBI) on November 16 said the draft scheme of amalgamation of Nedungadi Bank Ltd with Punjab National Bank (PNB) does not envisage allotment of shares of PNB to shareholders of the Kerala-based entity.

As per the draft scheme, RBI clarified that PNB would first evaluate the assets and determine the liabilities of Nedungadi Bank and on completion of this exercise, PNB would pay the depositors and creditors to the extent of their balances.

The shareholders of Nedungadi Bank would be entitled for payment of pro-rata value of shares only if any surplus remained after paying off the depositors and creditors, RBI said in a statement.

SEBI also said in a statement that the proposed merger of Nedungadi Bank with PNB was exempted from the applicability of regulations 10, 11 and 12 of its takeover code and consequently, there would not be any public announcement or open offer for acquisition of shares.

The statement from both regulators comes in the wake of media reports regarding price movement of shares of Nedungadi Bank ever since the scheme was notified on November 13.

Nedungadi scrip then rose by 4.45 per cent to Rs 15.25 and PNB was up by 1.21 per cent at Rs 41.85 a day later.

On the commencement of the scheme, which has been notified by RBI, the entire amount of the paid-up capital and reserves of the Nedungadi Bank would be treated as provision for bad and doubtful debts and depreciation and other assets of the bank.

PTI