Sarawsat Bank to acquire Mandvi Co-op Bank

Sarawsat Bank to acquire Mandvi Co-op Bank

BS Reporter / Mumbai October 12, 2006

Saraswat Co-operative Bank (SCBL) will acquire Mumbai-based Mandvi Co-operative Bank, enabling it to add over Rs 880 crore business to its books by end- December 2006.

It is also conducting due diligence on Pune-based Suvarna Sahakari Bank and is in discussion with four UCBs for prospective acquisitions.

The proposed merger of Mandvi Bank, a UCB with a strong Gujarati client base in Mumbai, is the first case of amalgamation of financially sound urban bank with another healthy largest bank in Cooperative sector. Mandvi Bank shareholders okayed its merger with SCBL at a meeting held yesterday.

Mandvi has net owned funds of Rs 54 crore with capital adequacy of 12.5%. Its total business comprising deposits (Rs 575 crore) and advances (Rs 307 crore) stood at Rs 883 crore at the end of March 31, 2006. Its gross non-performing assets are Rs 38 crore (9%). It has 19 branches with staff strength of 385, which will be absorbed by Saraswat Bank.

On rationale for the merger, Ekanath Thakur, SCBL director, said small cooperative banks face huge challenges with new set of regulations governing their business and it is a wise move on the part of Mandvi Bank to go ahead with merger when it is financially sound.

Reserve Bank of India