PUNE: The Maharashtra State Cooperative (MSC) Bank has submitted a
joint proposal for a merger with the Rupee Cooperative Bank. Vidyadhar Anaskar,
chairman of the board of directors of the bank, while addressing the media in
Pune, said a merger proposal had been submitted to Reserve Bank of India (RBI)
along with the Rupee Bank on January 17.
Mounting bad debt
of the Rupee Bank had led RBI to put severe sanctions on the bank while
superseding the erstwhile board of directors in 2013. A board of administrators
headed by chartered accountant Sudhir Pandit was looking into the affairs of
the bank with RBI extending the banking licence intervals. In the latest of
such extensions, the Rupee Bank’s licence was extended up to February 20.
Anaskar said the
merger proposal was submitted after a thorough and joint discussion with the
Rupee Bank. At present, the Rupee Bank has Rs 301.64 crore from 4.74 lakh
customers, whose deposits are within Rs 1 lakh, and Rs 981.32 crore from 26,978
customers with deposits more than Rs 1 lakh.
The total deposit
in the bank is around Rs 1,290.96 crore. Anaskar said the bank also has 304
employees who will be absorbed within the rolls of the MSC Bank. The
liabilities of the Rupee Bank being at Rs 1,465.95 crore, in its proposal, the
MSC has talked about infusing Rs 941.87 crore while expecting Depositors
Insurance and Credit Guarantee Corporation (DICGC) to infuse the remaining Rs
524.08 crore. The merger scheme, he said, will not affect deposit holder.
The merger
proposal has talked about staggered withdrawal of deposits in the Rupee Bank.
Thus, customers with less than Rs 1 lakh deposits will be allowed to withdraw
every two months in instalments of 20 per cent. For deposits over Rs 1 lakh,
the customer will be allowed to withdraw up to Rs 1 lakh in the first year.
The remaining
amount can be withdrawn in the next five years, with 20 per cent of the amount
being eligible for withdrawal. In both cases, the customers will be eligible
for interest at the rate of 6.5 per cent or the prevalent interest rate of the
MSC bank, whichever is higher.
Asked about the
effect of the merger, Anaskar said the bank was strong enough to absorb losses.
After this merger, the MSC bank will increase retail business that will help
diversify business, Anaskar added. At present, the bank’s main business is in
agriculture and agri-related sector with Anaskar wanting to increase its
presence in the retail banking sector. “The Rupee Bank’s existing
infrastructure will help us do the same,” he said.
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