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All the data you wanted on banks
on Co-operative banks
of PSU, Foreign & Private banks
the problems of Satara-based UWB had very little to do with UCBs
in the region, panic spread and depositors queued up before co-operative
banks to withdraw money. A few UCBs reported withdrawals in excess
of Rs 200 crore in a couple of days.
MERGER ON THE WALL
Mandir Coop Bank, Mumbai
Coop Bank, Mumbai
Coop Bank, Kolhapur
Coop Bank, Andhra Pradesh
Bank of Ahmedabad
Coop Bank, Gujarat
Saraswat, in addition to Pune’s Suvarna Co-op Bank and
Rupee Co-op Bank, is considering
four more merger proposals
*Shamrao Vithal has six merger proposals under consideration
revelation of huge losses in Pune-based Suvarna Sahakari Bank only
added to the frenzy. Cosmos Bank offered to take over Suvarna Bank,
but the very next day Survarna Bank was placed under the control
of an administrator.
people associated with the working of urban banks were quite skeptical
about the consolidation, as UCBs are democratically-run institutions.
But now, they are pleasantly surprised with the experience thus
far. M&As have been accepted as a fact, points out Krishna.
instances of mergers, though few, have generated the right kind
of pressure on the management of banks to put their houses in order.
There are indications that at least some banks are proactively taking
steps to consolidate. For these banks, mergers are more influenced
by emerging competition. In a first case of a strong co-operative
bank merging with a bigger and stronger UCB, the Mumbai-based Mandvi
Co-operative Bank was absorbed by Saraswat Bank. Mandvi has a strong
client base among the Gujarati business community. Says Ekanath
Thakur, a director of Saraswat Bank, Small co-operative banks
face huge challenges with new regulations governing their business
and it was wise to have merged the financially sound Mandvi.
RBIs guidelines make it clear that the central bank would
like to deal with a small number of large co-operative banks than
large number of small banks. Maharashtra State Urban Co-operative
Banks Federation chairman Mukund Ghaisas says, Such
union (merger of two strong banks) will give the benefit of scale
and bring about cost savings. The duplication of structure and processing
can be avoided.
federation has decided to cajole its 210 financially weak members
to explore possibilities of merging with stronger peers. Most
co-operative bankers have realised that allowing banks to go sick
only adds to their problems. Timely action (restructuring or consolidation)
can avert a crisis and help in keeping the confidence of customers
intact, Ghaisas avers. Most weak banks in Maharashtra came
up during the 1990s when a liberal licensing policy was in vogue.
Of the 1,872 urban banks in the country, over 650 are in Maharashtra
with over 50 per cent share in total business.
state-level TAFCUB may also suggest merger of potentially viable
banks. However, the consolidation process is not without challenges.
Most important being absorbing employees of target banks and retaining
churn happening in the sector could see the emergence of 10-15 large
co-operative banks over the next few years. In fact, Saraswat Bank
is already larger than some of the private sector commercial banks
such as Ratnakar Bank and Catholic Syrian Bank, says Thakur.
experts feel a greater degree of coaxing would be required to push
for more mergers as co-operative bank managements wont find
it easy giving up their identities.
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