MUMBAI, February 16: Bank scrips looked up and the industry was taken by surprise on Monday with a foreign news agency putting up a report saying Bank of India has moved the finance ministry with a proposal of merging two profit-making state-run banks, Corporation Bank and Oriental Bank of Commerce, with the Mumbai-based mega nationalised bank.According to the news report, Bank of India had sent the proposal to finance minister P Chidambaram a few months prior to the fall of the United Front government. The ministry, however, has not taken any decision.When contacted, Bank of India chairman M G Bhide categorically denied the merger proposal. He said, "The bank has not submitted any proposal to the finance ministry for merger of Corporation Bank and Oriental Bank of Commerce with Bank of India."Corporation Bank chairman R S Hugar said: "No such plan is on the anvil.. at least not known to me." Hugar said there has been a purely theoretical debate on the merger of banks. "It may take quite some timefor these things to actually happen."All the three banks have public shareholdings. In Bank of India, the government stake is pegged at 76.53 per cent while in Corporation Bank it is 68.33 per cent and Oriental Bank of Commerce 66.48 per cent.According to finance ministry officials, Bank of India chairman has recently submitted a "concept" paper to the ministry and not a "proposal". "The paper has suggested merger of strong public sector banks to create bigger players in the market traditionally dominated by the State Bank of India," finance ministry sources said.The Corporation Bank on Monday topped the non-specified list on the Bombay Stock Exchange in terms of turnover. The stock recorded a huge turnover of Rs 11.82 crore with about 10.63 lakh shares changing hands.According to market sources, Credit Lyonnais and Oppenheimer were reportedly placing buy orders at the counter for over 4 lakh shares at the market price. Corporation Bank chairman Hugar said the combined FII and NRI holdings in thebank was to the tune of 4.66 per cent last week.Reflecting the buying interests of FIIs, the stock surged by over 10 per cent, from the day's low of Rs 105.80. It touched a high of Rs 113.60 where a circuit filter was slapped to curb further price rise.``FII buying has been influenced by a number of reasons one being the promotion of the stock to the specified counter from February 23, which would allow the speculators to use the carry forward vehicle,'' said a BSE broker.Oriental Bank of Commerce recorded a sharp jump of over 284 per cent, in terms of volumes traded at the counter. The stock recorded a gain of 1.41 per cent to close at Rs 64.65 over Friday's close of Rs 63.75 with a huge volume of 1.62 lakh shares.The Bank of India counter registered a marginal gain of Rs 2.35 to close at Rs 37.50. Barring Bank of Baroda, most of the bank scrips gained on Monday.
