The merger between the troubled Bank of Rajasthan and ICICI Bank has finally been cleared after a meeting between the boards of the respective banks. The merger would enmark the third acquisition of an old private sector bank by the largest private sector bank of the country- ICICI Bank.

The deal would be approved in an extraordinary general body meeting called by both entities on 21st of June. According to ICICI Bank MD & CEO Chanda Kochhar, "We need shareholders' and RBI's approval. As per legal advice, FIPB nod is not applicable."

The merger has been facing quite some trouble from the government owing to the controversy of ICICI being a foreign bank.

ICICI Bank said that it has taken the decision following the due diligence reports obtained covering the advances, investments, deposits, properties and branches and employee-related liabilities, and the valuation report of BoR.

A director of BoR has said that the board of the bank has taken the decision in cooperation with the RBI nominees.

Ms. Kochhar said that the merger would not increase the NPA level of the bank. "We found the accounts quite satisfactory after the due diligence by Deloitte. We looked at the loans and advances, investments, properties and the deposit profile. We looked at a case-by-case analysis of around 80% of the loans and broadly, it's been quite satisfactory. The bank has well-diversified loans and advances. It has close to three million customers and has a granular deposit structure. The CASA (current account savings account) is at around 30%," she said.