Allahabad Bank joins race to acquire Rupee Co-op Bank

RBI had clarified that it had not cancellation of banking licence of Rupee

Kolkata-based public sector lender Allahabad Bank has evinced interest in acquiring the assets and liabilities of Rupee Cooperative Bank, the ailing Pune-based urban cooperative lender.

Shubhlakshmi Panse, chairperson and managing director of Allahabad Bank, said the bank was interested in the proposal, adding it would like to scale up presence in Pune, which had a thriving middle class and immense business opportunities. Currently, Allahabad Bank has just six branches in Pune.

Panse said after chartered accountants conducted due diligence and subsequent to the bank studying a report by accountants, Allahabad Bank would take a decision on the matter.

In February 2013, the Reserve Bank of India had placed Rupee Bank under an administrator, owing to the lender’s deteriorating financial health and the mounting portfolio of bad loans. The central bank had clarified it hadn’t cancelled Rupee Bank’s banking licence; rather, the cooperative bank would continue to undertake banking businesses, albeit with restrictions, till its financial position improved.

There is precedent to Allahabad bank’s interest in taking over assets and liabilities of urban cooperative bank. In 2009 Indian Overseas Bank merged Pune-based Suvarna Sahakari Bank. It was first such instance of merger of cooperative bank with public sector bank.

In 2010, Bank of Baroda, Mumbai-based public sector lender, took-over assets and liabilities of Memon Cooperative Bank.