Saraswat Bank Bids to Acquire New India Co-op: A Lifeline for Depositors?

Saraswat Cooperative Bank, India's largest cooperative lender, has officially approached the Reserve Bank of India (RBI) for approval to acquire New India Cooperative Bank Ltd. This potential merger could be a significant relief for thousands of New India Cooperative Bank depositors who have faced restrictions on accessing their funds since a moratorium was imposed on the bank on February 13th.

If the RBI greenlights the acquisition, Saraswat Bank will take on all of New India Cooperative Bank's assets and liabilities. Gautam Thakur, Chairman of Saraswat Cooperative Bank, assured the media that the interest component for all depositors will be fully protected. Currently, New India Cooperative Bank depositors are limited to withdrawing only up to ₹25,000.

New India Cooperative Bank currently holds deposits totaling ₹2,397.8 crore and has advances amounting to ₹1,162 crore.

Thakur expressed strong confidence in the RBI's approval, citing Saraswat Bank's successful track record of acquiring seven cooperative banks in the past. "Businesses of these banks rose from ₹1,900 crore to ₹9,200 crore post-acquisition," Thakur stated, highlighting the synergy between the two banks, particularly their complementary geographical presence.

While the exact acquisition cost was not disclosed, Thakur indicated it would be a "fraction of their capital." Saraswat Bank currently boasts a net non-performing asset (NPA) of nil, though this figure might see a slight increase post-acquisition. The bank recently reported a net profit of ₹518 crore for FY25, showcasing its strong financial health.