Mergers and Acquisitions helping consolidation in Cooperative Banks

There is lot of action on mergers and acquisitions in the co-operative banking sector in Maharastra. There are 636 UCBs in the state, with total deposits of around Rs 60,000 crore. One out of every five UCB is not financially sound.

Mumbai-based Abhyudaya Co-operative Bank, is set to acquire one more co-operative bank — Sant Janabai Urban Co-operative Bank — in Parbhani district of Marathwada. This will be the third acquisition for the bank which recently took over Citizen’s Co-operative Bank.

While Saraswat Bank acquired Maratha Mandir, Cosmos Bank took over four urban cooperative banks. These included Secunderabad-based Premier Urban Co-operative Bank and Annapurna Mahila Co-operative Bank, Baroda-based Unnati Co-operative Bank and Co-operative Bank of Ahmedabad. Cosmos is on a consolidation phase now, and will look at further acquisitions much later.

Shamrao Vithal Co-operative Bank (SVCB) a leading multi-state cooperative bank is acquiring two more cooperative banks — Kolhapur’s Mahavir Co-operative Bank and Bangalore’s Sauhadra Co-operative Bank. It plans to conclude acquisition of the two co-operative banks by October, 2006 and has already received permission from the Reserve Bank of India.

SVCB has recently completed the process of absorbing Nashik-based Saptashringi Co-operative Bank Saptashringi Co-op Bank had two branches in Nashik. Mahavir Co-operative Bank and Sauhadra Co-operative Bank have 11 branches each. SVCB currently has a network of 48 branches across Mumbai, Pune, Aurangabad and Nashik in Maharashtra, in Bangalore and Goa.

M&As have become inevitable due to the virtual ban by the RBI on issue of fresh branch licenses for UCBs and is going to pick up further in coming days.

Read on M&A in Indian Banks