The synergy created by the amalgamation of the Cauvery Grameena Bank (CGB) and the Kalpatharu Grameena Bank (KGB) has helped improve capital, reserve and asset base of the amalgamated bank, now christened Cauvery Kalpatharu Grameena Bank. | |
| The two banks were amalgamated by the Centre under the Regional Rural Banks Act, 1976. It formally began functioning under the new name from its Mysore headquarters from June 29. The State Bank of Mysore continues to be its sponsor bank and the new bank comes within the ambit of a scheduled bank. |
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| Both the amalgamated banks were profit-making banks with sound reserves, operating in six districts of Mysore, Chamarajanagar, Hassan, Tumkur, and Bangalore rural and urban districts with a 202-branch network. |
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| Instead of two rural banks, one unified bank operates in these six districts now with better operative strength. |
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| The combined total business has exceeded Rs 1,402.25 crore with an aggregate deposit of Rs 797.70 crore and total advances of Rs 604.55 crore on the date of amalgamation on June 24. |
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| "The synergy will bring about efficient fund operation. KGB has good deposit strength, while in CGB the loan requirement is more. The CGB, therefore, had to borrow paying interest so far," bank's general manager P R Madhyastha said. |
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| "Apart from saving this interest payment, we can stretch our advances for bigger projects. Earlier, CGB could advance around Rs 2-3 crore. Now we can extend up to Rs 9 crore," he added. |
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| Speaking to Business Standard, he said that another plus factor would be savings in the cost of deposit, which will come down to 4.5 per cent from the present 5 per cent. Overall, our efficiency will go up and overheads come down." |
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| The two amalgamated banks are making advances mainly to the agricultural sector. Of the Rs 604 crore as advances on the date of the merger, Rs 393 crore has gone to the agricultural sector. |
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| Of the 87 per cent advanced to the private sector, a big chunk of some 60 per cent goes towards agriculture. The total private sector advances account for Rs 528 crore. |
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