Shyamrao Bank keen on Mahila Bank merger

Mumbai-based Shyamrao Vitthal Cooperative Bank has shown interest in reviving Nagpur Mahila Nagari Sahakari Bank and extended a merger proposal to this effect.

A four-member team of Shyamrao Bank has visited the Mahila Bank to verify its financial records.

The vefication procedure will take four to five days after which the team will present a report to the Shyamrao Bank's board.

Former administrator of the Mahila Bank Gautam Walde had submitted proposals to merge with leading urban cooperative banks in Maharashtra including the Shyamrao Vitthal Cooperative Bank.

The Shyamrao Vitthal Cooperative has a deposit base of Rs 1,300 crore and did Rs 3,000 crore business last financial year. The bank has 35 branches in western Maharashtra. If the merger takes place it will have a strong branch network in Vidarbha region.

Nagpur is seen as a potential investment destination by IT companies and construction majors. The cooperative bank also expects some of its clients form western Maharashtra to enter Nagpur for business. The bank expects to give them good branch network and services then.

"This is one easy way to thwart competition from bigger commercial banks," said the bank official.

Earlier, Akola Urban Cooperative Bank had also prepared a due diligence report on the Mahila Bank.

Another Mumbai-based cooperative bank the Saraswat Cooperative Bank had also shown interest in Mahila Bank and sought certain clarifications. The Mahila Bank has deposits worth Rs 92 crore. It recovered Rs 35 crore from defaulters last year.

The bank has 41,000 shareholders and over 60,000 depositors. It started commercial operations in 1974. It troubles for the bank started in August 2004.