The Reserve Bank of India (RBI) has sanctioned the scheme of amalgamation of ING Vysya Bank with Kotak Mahindra Bank. The scheme has been sanctioned in exercise of the powers contained in sub-section (4) of section 44A of the banking regulation act, 1949.

The scheme will come into force with effect from Apr. 1, 2015. All the branches of ING Vysya Bank will function as branches of Kotak Mahindra Bank with effect from Apr. 1, 2015.

Earlier, the merger of Kotak Mahindra Bank and ING Vysya Bank was approved by the respective boards in an all-stock amalgamation of ING Vysya with Kotak on Nov 20, 2014.

According to the conditions of merger, ING Vysya shareholders will receive 725 shares in Kotak for 1,000 shares of ING Vysya. This exchange ratio indicates an implied price of Rs 790 for each ING Vysya share based on the average closing price of Kotak shares during one month to Nov. 19, 2014, which is a 16% premium to a like measure of ING Vysya market price. 

Shares of Kotak Bank gained Rs 9.45, or 0.72%, to trade at Rs 1,322.60. The total volume of shares traded was 3,116 at the BSE (9.18 a.m., Wednesday).