| GEO Business | | MCB-RBS transaction suffers delay | Updated at: 1855 PST, Saturday, October 17, 2009
 KARACHI: State bank of Pakistan has not yet granted approval to MCB’s merger with Royal Bank of Scotland, leading to a delay in completion of the acquisition process.
According to sources, the central bank has raised objections that approval will be granted only when MCB fulfills the requirement regarding completion of sponsor’s shares.
The central bank has raised the objection over MCB’s violation of clause-4 of banking law.
Under the legal requirement, the sponsors’ shares are to be deposited at CDC. However, the experts view this requirement as inapplicable in the transaction in question while the requirement of Central Depository Company is also not applicable here.
According to experts, State Bank should have scrutinized Royal Bank of Scotland’s assets under the respective articles before approving the said deal. |  |
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