According to this agreement, UWB, with a deposit of Rs 4,349 crore, has agreed for the nomination of Sicom managing director and its nominee AKD Jadhav, Sicom director BN Paranjpe and former state chief secretary Sharad Upasani on its board. In turn, UWB managing director and its nominee ST Gadre will be accommodated on the Sicom board.

Although Sicom, which is the highest shareholder in the bank holding 9.8 per cent, had pressed for the nomination of four directors, it had agreed for three. It decided not to press for the nomination of leading industrialist Dilip Piramal on the UWB board.

Sicom chairman Ram Pradhan and Mr Gadre confirmed that such an agreement has been reached at and said, "After wide-ranging discussions, both the financial institutions have agreed to establish an enduring relationship on the basis of mutual benefit." Mr Pradhan also admitted that Sicom had to follow the legal route and talk to other shareholder group of UWB to press for its demand for the nomination. With these developments, the board of directors of Sicom as well as UWB will have 12 members each.

Sicom's board comprises members of state-run Maharashtra Industrial Development Corporation, Maharashtra State Financial Corporation, UTI, IDBI and Mr Harsh Goenka. The UWB board, which had a vacancy for four members, would be filled up with its decision to nominate Mr Jadhav, Mr Upasani, Mr Paranjpe and its former chairman Mr PN Joshi. Apart from Sicom's 9.8 per cent stake, other financial institutions, including IDBI, hold 3.2 per cent, while FIIs hold another 0.4 per cent of the equity. The directors hold 0.4 per cent, corporate bodies 17.3 per cent, while the balance 68.9 per cent is held by over 55,000 individual shareholders.

In case of Sicom, 49 per cent equity is held by the state government while 40 per cent by UTI, 2 per cent by employees and 9 per cent by others.Sicom insiders told The Financial Express that initially UWB was reluctant to give nomination fearing "taking over a managerial control." However, UWB board, during a series of negotiations, realised that synergy between the two organisations would help grab abundant business opportunities in the liberalised economy. The UWB also realised that the association would help make the universal banking a reality.

Sources from Sicom and UWB admitted that institutions such as LIC, GIC and IDBI have played a major role in arriving at an understanding on the vexed issue of nomination on the UWB board. Simultaneously, the UWB shareholders also realised the importance of synergy between two and offered their support. These sources said that Sicom, with its reach and presence as a development financial institution for 34 years in the state, and UWB, which is seen as a "people's bank," can be a proper combination to take on ICICI Bank, UTI Bank, HDFC Bank and IDBI Bank.