The Fall of United Western Bank

            
 
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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Case Details:

Price:

Case Code : FINC040 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

Themes

Asset-Liability Management, Bank Failures

Case Length : 15 Pages
Period : 1996-2006
Organization : United Western Bank.
Pub Date : 2006
Teaching Note : Not Available
Countries : India
Industry : Banking

Abstract:

The case describes the growth and collapse of United Western Bank Limited (UWBL), a private sector commercial bank in India. Since the late 1990s, UWBL was facing several problems including asset-liability mismanagement, inefficient management of bank's assets, irregular transactions with some of its major shareholders like Makharia Group, conflicts between the bank's major shareholders regarding the ownership of the bank and poor governance. These problems collectively resulted in the collapse of UWBL. In order to protect the interests of the creditors of UWBL, the Government of India (GoI) announced the merger of the bank with IDBI Bank. The case further details the terms of the merger and ends with a brief analysis of the future prospects of the merged entity.

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Issues:

Analyze the reasons that led to the fall of United Western Bank

Discuss the importance of proper asset-liability management in a bank

Examine the role of RBI as a banking industry regulating authority and debating on the justifiability of its actions in the UWBL fiasco

Appreciate the importance of efficient and transparent management

Contents:

  Page No.
The Moratorium 1
Background Note 2
The Problems 3
The Fall 6
The Steps Taken 7
The Road Ahead 8
Exhibits 10

Keywords:

United Western Bank, Asset-liability Management, Bank Failures , Capital Adequacy Ratio, Non-performing Assets, Makharia Group of companies, Capital Adequacy Norms, Moratorium Order, Capital to Risk Weighted AssetS, Liquidity Management, Banking Regulation Act, Bank Restructuring, Asset Quality, UWBL-IDBI Bank Merger

The Moratorium - Next Page>>


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