Kapol Co-operative Bank, a Mumbai-based multi-state scheduled bank is set to acquire two Gujarat-based cooperative banks by the end of the current financial year.
“We have informed the Registrar of Cooperative Societies for the state about the proposal and after getting its clearance, we would apply to the Reserve Bank of India (RBI),” said KD Vora, Chairman, Kapol Co-operative Bank.
Currently, the bank has a branch at Surat and post-acquisition it will add another six branches. According to RBI, inter-state merger of cooperative banks is possible only when one of them is registered under Multi-State Cooperative Societies Act.
Though Vora declined to furnish details about the targeted banks, he said one of them is a Mahila cooperative bank.
“Together both the banks would have a deposit base of Rs 60-75 crore with six branches and one is a Mahila cooperative bank. We carter to a specific clan of Gujarati society and hence it makes sense to increase our presence in the state,” he added.
According to the sources close to the development, the two Gujarat-based banks approached Kapol cooperative bank for a possible merger six months ago and accordingly the realisable value of assets are assessed through a process of due diligence as per RBI guidelines.
“It would take some time to reach the valuation figures,” the source added.
The entire process would take at least another six months, as after the process of due diligence is over, Kapol Co-operative Bank would have to forward a copy of the scheme to the central bank along with the draft scheme, valuation report and other information relevant for consideration of the scheme of merger.
Kapol Co-operative Bank has 15 branches of which 14 are in Mumbai.