Saraswat seeks RBI approval to acquire New India Cooperative Bank

Synopsis

Saraswat Cooperative Bank has requested RBI's approval to acquire New India Cooperative Bank, aiming to alleviate the financial distress of thousands of depositors facing restricted access to their savings due to an RBI moratorium.

Mumbai: India's largest cooperative bank, Saraswat Cooperative Bank, has sought central bank approval to acquire New India Cooperative Bank Ltd, a senior management official stated on Tuesday.

If the Reserve Bank of India (RBI) approves the merger, Saraswat will acquire the target's entire liabilities and assets, bringing relief to thousands of depositors who are unable to access their entire savings after RBI imposed a moratorium on New India from February 13.

Gautam Thakur, chairman of Saraswat Cooperative Bank, told the media that the interest component of depositors will be fully protected. At present, each New India depositor can withdraw up to ₹25,000.

New India Cooperative has ₹2,397.8 crore deposits and ₹1,162 crore as advances.

"We are confident that RBI will not turn down the proposal. In the past Saraswat has acquired seven cooperative banks. Businesses of these banks rose from ₹1,900 crore to ₹9,200 crore post-acquisition," Thakur said. He said there is a synergy between the two banks and the key driver being that geographical presence.

Although the management declined to share the cost of acquisition, Thakur said, it will be a 'fraction of their capital'.

At present, the bank's net non-performing asset is nil but post the proposed acquisition it could rise marginally. The bank has posted a net profit of ₹518 crore for FY25.

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