Co-op bank eyes banks in Nashik, Vadodara, Udupi

Mumbai-based Abhyudaya Co-op Bank has planned an aggressive expansion drive and to create a branch network across states in the country by acquiring weak banks in the co-operative sector.

The immediate target before it is the Nashik-based Nashik People's Co-operative Bank and Janatha Co-operative Bank based in Udupi district in Karnataka, said Abhyudaya Bank Managing Director P M Shetty here.

While Nashik People's has a network of 14 branches with deposits of Rs 125 crore and advances of Rs 66 crore, the Janatha Co-operative has six branches, Shetty said.

He added that the bank has also completed the due diligence for Vadodara-based Shrikrishna Co-operative Bank and would soon consider the possibility of taking it over.

Shetty said that the proposal to acquire Nashik People's has been sent to the Reserve Bank of India and a decision is awaited. Saraswat Co-op Bank is also in the race for acquiring the bank, he informed.

In the backdrop of the RBI's policy of not allowing any fresh branches, acquisition is the only route possible for a quick expansion, Shetty said, making it clear that the board will however take a very careful decision about which bank to acquire.

"We cannot afford to become weak ourselves while acquiring a weak bank," he quipped.

Shetty said that the 13 branches of Citizen Co-operative Bank which Abhyudaya acquired a year ago are back in the black and have been integrated into the bank's centralised banking system.

Abhyudaya took a hit of Rs 35 crore in profits on acquiring Citizen but the loss will be recouped over the next five years as per the RBI guidelines, he said.

The 13 branches of Citizen, now in the Abhyudaya network will be renovated and relocated where necessary over the next couple of years, he added.