Wednesday, Oct 22, 2014

15 months on, Rupee bank merger hangs in balance

Written by Parthasarathi Biswas | Pune | Posted: June 3, 2014 2:10 pm

Fifteen months after the Reserve Bank of India (RBI) suspended the Board of Directors of the Rupee Cooperative Bank and imposed strict regulations on it, plans to merge it with another bank have not made much progress.

A proposal to merge the bank with Saraswat Bank is with the RBI, the move to merge it with Allahabad Bank is stuck pending a due diligence report and merger talks with Bank of India has not made any progress.

The cooperative bank posted a cumulative loss of Rs 613 crores for financial year 2013-14.

Due to spiralling non-performing assets (NPA), the RBI had put the bank under administrators last year. RBI put a moratorium on withdrawal of money from the bank, which led to consternation among its 6 lakh customers in 36 branches.

Director Sugar Commissionerate Sanjaykumar Bhosale and chairman Vidya Sahakari Bank Vidyadhar Anaskar had been appointed administrators of the cooperative bank.

Bhosale said merger talks had not yielded results. “A special general meeting (SGM) to discuss the merger with Saraswat Bank was not allowed by the state government. We planned to hold it in January. The proposal for the merger is with the RBI but there has been no response yet,” he said.

A merger with Kolkata-based Allahabad Bank has seen hardly any movement, Bhosale said. “The bank invited tenders from authorized chartered accountants to conduct the due diligence report but there has been no further communication with our office,” he said. Bhosale said that without these reports, merger talks cannot fructify.

As for talks with Bank of India, Bhosale said no headway has been made. “We are seriously looking for a bank financially strong enough to merge the bank with,” he said.

As of today, mixed banking business stood at Rs 2,000 crores, with NPAs of Rs 360 crores. Performing assets is to the tune of Rs 231 crores. Bhosale said a special audit has been ordered by commissioner of cooperatives.

“This audit would take into account transactions from 1970 to 2013. Any criminal and wilful swindling of the bank’s funds would be noted and action taken,” he said.

comments powered by Disqus
Featured ad: Discount Shopping

Most Popular

Follow

Get every new post delivered to your Inbox.

Join 1,284 other followers