Saraswat Co-operative Bank to acquire fraud-hit New India Co-operative Bank
The Reserve Bank of India has given its in-principle approval after Saraswat Bank approached the central bank with its proposal for amalgamation, and a final nod will depend on the shareholders of both the banks. Following the merger, Saraswat Bank will take over all assets and liabilities of New India Co-operative Bank, and the interests of depositors will be fully protected, its chairman Gautam E. Thakur said at a press conference in Mumbai.
The merger of the entities is expected to happen in August-September and the turnaround of the fraud-hit bank might take one-two years, Thakur said. Due diligence has been conducted and a special audit is being conducted for the merger. The bank is working with the Economic Offences Wing (EOW) and other law enforcement agencies to ensure fairness and accountability, he added.
Mint earlier reported that the Reserve Bank of India in February allowed depositors to withdraw up to ₹ 25,000 from New India Co-operative Bank, after superseding the board of the Mumbai-based New India Co-operative Bank due to poor governance standards and irregularities in its lending business. A former general manager of the bank, Hitesh Pravinchand Mehta, was allegedly involved in siphoning ₹ 122 crore from the lender. He was later arrested.
NICBL has recorded a negative net worth of ₹ 102.74 crore for FY25. It reported a total business of ₹ 3,560.52 crore, which includes deposits of ₹ 2,397.85 crore and advances of ₹ 1,162.67 crore. NICBL has around 200 employees currently and 90 employees have resigned after the scam.
Saraswat Bank has reported a total business of ₹ 91,814 crore as on 31 March 2025, including deposits of ₹ 55,481 crore and advances of ₹ 36,333 crore. The bank reported a net profit of ₹ 518.25 crore in FY25. It has maintained gross NPAs at 2.25% and net NPAs at zero for the third consecutive year. The capital to risk-weighted assets ratio (CRAR) of the bank stands at 17.43%
Saraswat Bank, India's largest urban co-operative bank, has acquired more than seven financially weak co-operative banks over the past few years, rescuing over 800,000 depositors. Saraswat Bank has helped troubled depositors without any haircut, ensuring full protection of interest of depositors, Thakur said.
After the acquisitions, the combined business of these seven weak banks has grown from ₹ 1,900 crore to ₹ 9,200 crore in five years.
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