Mumbai (PTI): Reserve Bank of India has approved the merger of Centurion Bank of Punjab with HDFC Bank and the amalgamation would be effective from May 23.

"The RBI hereby sanctions the appended scheme of amalgamation of CBoP (Transferor Bank) with the HDFC Bank Ltd (Transferee Bank). The scheme shall come into effect from May 23," HDFC Bank said in a filing to the Bombay Stock Exchange.

The boards of HDFC Bank and CBoP had given in-principle approval for the merger of both the banks in February.

Following the in-principle nod, HDFC Bank had approved the share swap ratio of 1:29.

As per the ratio CBoP shareholder would get one share of HDFC bank for every 29 shares held.

With the merger, the combined entity will have a nationwide network of 1,148 branches and the deposits would climb up to Rs 1,20,000 crore.

At the same time, advances of the combined entity would touch Rs 85,000 crore while the balance-sheet size would swell to Rs 1,50,000 crore.

In a bid to maintain the promoter's holding at 23.2 per cent in the merged entity, HDFC Bank made a preferential offer of about 2.62 crore convertible warrants to its promoter Housing Development Finance Corporation Ltd.

HDFC has to pump in Rs 4,000 crore to retain its holding in the bank. According to the rules, 10 per cent of this amount should be paid within 15 days after receiving the RBI approval for the merger.

HDFC Bank Managing Director Aditya Puri will head the merged bank, while Jagdish Capoor will continue as non- executive Chairman.