Cosmos Bank says no to RBI offer to be South Indian Co-op administrator

Mumbai, Nov 14 | Updated: Nov 15 2005, 06:17am hrs
In a new twist to the tale, Pune-based Cosmos Bank has refused the Reserve Bank of Indias (RBI) offer to become the administrator of the beleaguered South Indian Co-operative Bank. Sources said that the banks board of directors turned down the offer of becoming administrator to the Mumbai based sick bank.

The RBI has now approached the Saraswat Co-operative Bank, either to be the administrator, or for a merger of the sick bank with the countrys largest co-operative bank.

Saraswat Banks MD, SK Banerjee, told FE: We have been approached by the RBI to act as either the administrator of South Indian Co-operative bank, or for merging the bank with ours. We had conveyed it to the RBI earlier also, that we are open taking over the bank, but with some financial support from the state government or the RBI, as the losses of the bank are too extensive, and it does not have any realisable assets.

The commissioner of co-operation, and registrar of co-operative societies, Maharashtra, Shaileshkumar Sharma also said, We have approached several banks either for a merger or for administrator for the South Indian Co-operative Bank, but no bank so far has come forward. While, our best efforts are to revive the bank, if this scenario continues, the RBI may have no option other than to cancel the licence of the bank. It may be recalled that Cosmos Bank had held high-level meetings with RBI officials and the staff of SICB.

Opting Out
Cosmos Bank backs out of proposal to be administrator of South Indian Co-op Bank
RBI approaches Saraswat Bank for either merger or appointing administrator
Saraswat Bank open to merger provided it receives monetary support regarding Rs 104 cr losses of South Indian Co-op bank
The bank had agreed to take over the administrative rights, the loan recovery process and the day-to-day functioning of the sick bank, after the banks CEO, PK Sukhtankar, chairman Raghavan Sarathy and vice-chairman VT Udhayar were taken in judicial custody for the mismanagement and mis-appropriation of the banks funds to the extent of Rs 104 crore.