The GTB board will meet on Wednesday to discuss the move to seek a higher swap ratio, even as the entire merger proposal has come under a cloud following the stockmarket scam involving broker Ketan Parekh and GTB's alleged links with him.

UTI sources, on the other hand, made it clear that from their side the merger was `on hold', since there were factors which had now emerged which were not known when SBI Capital Markets made the first valuation. UTI sources said the second valuation was also before RBI and on its part UTI would like to `revisit all the issues connected with the merger.'

GTB sources told The Financial Express that the board meeting will take up the issue of a higher swap ratio in favour of GTB, since the bank feels there is scope for going higher in favour of itself. The bank feels that the second valuation by Deloitte, Haskins and Sells had recommended the earlier ratio of 2.25:1, but had indicated there was a scope for going higher than this.

"The Deloitte valuation had gone higher, and then considered qualitative factors of the UTI group before coming down to 2.25:1. We, therefore, feel there is scope to go up in favour of GTB," the sources explained. On the alleged price-rigging in the GTB stock, the GTB view clearly is that the rigging issue and the proposed merger are two completely unrelated issues, since the Deloitte valuation had taken a host of other factors into account before undertaking the valuation. Therefore, the rigging aspect should not be allowed to come in the way of the merger, GTB sources said.

This, effectively, would mean a face-off could emerge between GTB and UTI Bank, since the UTI group too now wants a fresh ratio in its favour, following allegations of price-rigging in the GTB stock. The UTI group had also indicated that it wanted the `Global' name dropped from the proposed merged entity. UTI wants the entire details to come out on the Sebi probe into GTB and the dust to settle before taking a final view on the merger.

The second valuation had become necessary when there was talk that the first one had been undertaken when the aspect of price-rigging in GTB shares had not come out in the open. In the interest of boosting shareholder confidence, UTI Bank and RBI had both agreed that a second valuation would be a good idea. The second valuation confirmed the first, but had said there was a provision to go higher.