IDBI & United Western Bank Merger - Are Shareholders of GTB and Nedungadi Bank Fools?

I am wondering how RBI announced a draft scheme of amalgamation of the United Western Bank with IDBI with a condition that the shareholders will be paid Rs.28 per share. If one looks at the statement in the report presented by RBI,

"The transferee bank shall make an upfront payment in cash of Rs.28/- (Rupees twenty eight only) in respect of every fully paid-up share in the transferor bank, to the members of the transferor bank, who were, as on the prescribed date, registered as the holders of shares of the transferor bank, in partial satisfaction of their claim in respect of their interest in such shares."its puzzling how RBI was not thinking about the shareholder welfare in the case of Nedungadi Bank Ltd in 2002 and Global Trust Bank Ltd in 2004. This is the worst thing that RBI can do for the shareholders of these banks which were merged without paying anything to them.

Why RBI is deciding the suitor when there are so many banks showing interest to take over the assets of UWB. Why there is a difference in treating shareholders?? What is the reason for paying money to the shareholders of United Western Bank alone? Are they special? Are they different?

There are many questions to be answered by RBI on this deal. Will they?

Source : Equity Bulls

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