Saraswat Bank Seeks RBI Nod To Take Over Troubled New India Cooperative Bank
Moneylife Digital Team 02 July 2025
In a significant step aimed at strengthening the urban cooperative banking sector, Saraswat Cooperative Bank Ltd has voluntarily sought approval from the Reserve Bank of India (RBI) to merge New India Cooperative Bank Ltd (NICBL) with itself. The proposed amalgamation was announced by Saraswat Bank chairman Gautam Thakur at a press conference in Mumbai and is subject to approval from the shareholders of both banks.
 
 
The proposed merger is viewed as a strategic consolidation intended to expand Saraswat Bank’s footprint, strengthen customer outreach and improve operational efficiency. Upon completion of the amalgamation, Saraswat Bank will assume all assets and liabilities of NICBL, while ensuring full protection of depositor interests.
 
Saraswat Bank, India’s largest urban cooperative bank, has a legacy of over 100 years. As of 31 March 2025, the Bank operated 312 branches and 303 ATMs across eight states—Maharashtra, Goa, Gujarat, Karnataka, Madhya Pradesh, Delhi, Haryana and Uttar Pradesh. It reported a total business of Rs91,814 crore, comprising Rs55,481 crore in deposits and Rs36,333 crore in advances. The lender posted a net profit of Rs518.25 crore and continued to maintain a strong financial profile, with gross non-performing assets (NPAs) at 2.25%, zero net NPAs for the third consecutive year and a robust capital to risk-weighted assets ratio (CRAR) of 17.43%.
 
In contrast, as of 31 March 2025, New India Cooperative Bank reported deposits of Rs2,397.85 crore and advances of Rs1,162.67 crore, with a total business volume of Rs3,560.52 crore. However, the lender posted a negative net worth of Rs102.74 crore for the financial year (FY)24–25. NICBL operates 27 branches, including 17 in Mumbai, six across Thane and Palghar, two in Surat and one each in Pune and Navi Mumbai.
 
Saraswat Bank has a proven track record of reviving financially distressed cooperative banks through successful mergers. Its past takeovers include institutions such as Maratha Mandir Cooperative Bank, Mandvi Cooperative Bank, Annasaheb Karale Janata Sahakari Bank, among others. Through these strategic integrations, Saraswat Bank safeguarded the interests of over eight lakh depositors and expanded the combined business from Rs1,900 crore to Rs9,200 crore within five years.
 
In February this year, citing supervisory concerns and the lender's liquidity position, RBI imposed operational restrictions on the Mumbai-based multi-state scheduled bank. RBI also superseded the board of directors of New India Cooperative Bank for the next 12 months. It also appointed Shreekant, former chief general manager (CGM) of the State Bank of India (SBI) as administrator to manage the affairs of the Bank during this period. Further, to assist the administrator, RBI appointed a committee of advisers which includes Ravindra Sapra (former GM of SBI) and Abhijeet Deshmukh (chartered accountant-CA) as members.  
 
Under these restrictions, New India Cooperative Bank is prohibited from granting or renewing loans, making investments, incurring liabilities (including borrowing or accepting deposits), or disbursing any payments without prior written approval from RBI. However, due to these restrictions, several customers and depositors rushed to withdraw money but were left helpless. 
 
To safeguard Bank's depositors, RBI has assured that eligible depositors will receive deposit insurance claims of up to Rs5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961, subject to verification. For more details, depositors are encouraged to visit the DICGC website or contact the Bank. (Read: New India Cooperative Bank: RBI Restricts Loans, Withdrawals for 6 Months, Appoints Administrator After Dismissing Board)
 
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