By Kshipra Petkar
Saraswat Co-operative Bank has approached the Reserve Bank of India for amalgamation with New India Co-operative Bank, the management said on Tuesday. The amalgamation is subject to approval of shareholders of both the banks.
If approved, this would be the 8th co-operative bank that Saraswat Bank has taken under its wing. Saraswat Bank chairman Gautam Thakur said this decision was not taken to improve the growth of the bank, but to protect depositors’ interest.
“If you ask me the timeline, I am not so sure, but the RBI will definitely give an approval because it also wants to see a resolution to this particular issue. When that happens, my estimate is by August-September, this should go through,” Thakur said.
He said the due diligence of New India Co-op’s book was done in 10-15 days and possible losses have been assessed. After the merger, net non-performing asset ratios might inch up by a few basis points. He was also confident that not many depositors would withdraw from the bank after the merger. Currently, New India Co-op has around 122,000 depositors.
Post merger, Saraswat will take over all the assets and liabilities of New India Co-operative Bank, the management said. As on March 31, New India Co-op reported deposits of Rs 2,397.85 crore and advances of Rs 1,162 crore. It has a negative net worth of Rs 102.74 crore for 2024-25 (Apr-Mar).
On February 13, citing supervisory concerns, the RBI imposed restrictions on New India Co-operative Bank, barring it from granting or renewing any loan and advance, or accepting any fresh deposit.
Thakur said the bank may issue some shares in a particular ratio to shareholders of New India Co-operative and assured that no one involved in the fraud will be a shareholder. “We will co-operate with law enforcement agencies and ensure that justice is done.”