Two co-op banks merge

Two co-op banks merge
ENS ECONOMIC BUREAU

Mumbai, Jan 12: After private-sector banks, it is now the turn for co-operative banks to merge. The Mumbai-based Adarsha Janata Sahakari Bank Ltd has been amalgamated with the Pune-based Shree Suvarna Sahakari bank Ltd. The merger has been approved by the Reserve Bank of India (RBI) and Co-operative Department of Maharashtra.

Shree Suvarna Sahakari Bank is a premier co-operative bank in Maharashtra and was founded in 1969. The bank has network of 10 branches and has extended working capital of more than Rs 500 crore. The bank has earned a reputation in Pune for its quality services to more than three lakh customers.

Adarsha Janata Sahakari Bank operates in Mumbai with a single branch at Sion. Because of mounting burden of overdues and liquidity crisis, the bank was declared a weak bank and was under rehabilitation since 1992. As the non-performing assets of the bank rose to almost 100 per cent of total advances, it was impossible to return money to depositors. Under such circumstances and conditions, the bank was left with two options -- either to liquidate or merge with a sound bank.

The new board of directors, under the leadership of Upsham, decided to seek merger and received mandate from members to do so. They approached Shree Suvarna Sahakari Bank to explore a possible merger.

Suvarna bank decided that it has to necessarily see that its own depositors would not be jeopardised. Therefore, the co-operative department appointed the administrative board of representatives of Shree Suvarna Sahakari Bank to take managerial responsibility of Adarsha Janata Sahakari Bank.

During three years of its tenure, the administrative board returned money to needy depositors.

The Urban Banks Department of RBI examined the merger proposal and ensured that the merger would be in the best interests of depositors of both the banks. With all-round progress registered by Shree Suvarna Sahakari Bank over the last three years, it became now possible to absorb the entire accumulated losses of Adarsha Janata Sahakari Bank out of only one year's profit of Suvarna Bank.

With this merger, Shree Suvarna Sahakari Bank has its first branch in Mumbai at Sion. "Renovated premises owned by the bank, full computerisation and inter-branch link between Pune and Mumbai will allow us to give quality services to Mumbai -- the services for which the bank is already known in Pune. The bank has plans to open another branch at Dadar (west) in near future", according to a release issued in Mumbai.