Speculative reports suggested that two major private banks – Kotak Mahindra Bank and Axis Bank – are in talks for a possible merger but the two banks have strongly denied any such development. The reports said the two entities are exploring the possibility so that there could be the creation of a banking behemoth in the private sector with assets worth about Rs2.5 lakh crore. The rumors originated from the stock markets in the country. The reports gained credence as the government is proposing to divest its stakes in some of the public sector units, including SUUTI, or the Specified Undertaking of the Unit Trust of India, which is a major shareholder in Axis Bank. The government has 12% stake in SUUTI and holds 18% stake in the bank through LIC and other insurance companies. Besides, the reports also pointed out that Kotak Mahindra Bank needed to bring down its promoters’ stake as per a directive of the RBI. A spokesperson for Kotak Mahindra Bank the bank does not comment on rumors and speculation while Axis Bank spokesperson said the bank is one of the strongest financial institutions in the country with a large customer franchise and advised media to exercise extreme caution in dealing with this misinformation.
