Shamrao Vithal Bk to merge with two co-op banks
Nashik: The Mumbai-based Shamrao Vithal Co-operative Bank (SVC) is planning to merge two co-op banks, the Kolhapur-based Mahavir Co-op Bank that has 11 branches and the Bangalore-based Sauhadra Co-op Bank with 11 branches with itself. Recently SVC merged Nashik-based Saptashringi Co-op Bank with itself.

SVC has received the nod of the Reserve Bank of India (RBI) for the merger, and will take over both the co-op banks by October 2006.

Company officials said the Reserve Bank of India's restrictions imposed on co-operative banks on opening new branches, co-op banks are left with no choice but to look for mergers with similar banks or acquire smaller or weaker banks as a growth driver.

In fiscal year 2005-06, SVC registered 35 per cent growth in overall business. The bank's turnover in 2005-06 was Rs4,500 crore, of which 70 per cent was in the form of fixed deposits. The bank earned a net profit of Rs 54 crore in FY06, and has set a target of Rs60 crore for FY07. The NPA of the bank is 1.89 per cent.

The bank has a network of 48 branches spread over Mumbai, Pune, Aurangabad and Nashik in Maharashtra, Bangalore and Goa. The bank has 750 employees and 70,000 share holders.
Back to News Review index page  

RBI issues new banking norms in times of calamity
Mumbai: To quickly restore all banking services in areas affected by natural calamities, the Reserve Bank of India (RBI) has issued instructions to banks which include providing continued access to the customers to their bank accounts and facilitating opening of new accounts by persons affected by natural calamities, especially for availing relief announced by the government and agencies. The guidelines also cover measures to be taken by banks to ensure continuity in other services, like cheque clearing services and supply of cash.

The guidelines state that the areas where the bank branches are affected by natural calamity and are unable to function normally, banks may operate from temporary premises, under advice to the Reserve Bank. They could also cater the services through other channels such as satellite offices, extension counters or mobile banking facilities. Further, to satisfy customer's immediate cash requirements, banks could consider waiving the penalties for accessing accounts, such as, fixed deposits. Restoration of the functioning of ATMs at the earliest or making alternate arrangements for providing such facilities may be given due importance While extending financial assistance, banks may, to their existing customers, provide consumption loans up to Rs10,000 without collateral; extend timely fresh financial assistance to resume productive activities not only to the existing borrowers, but also to other eligible borrowers. Depending on the severity of the calamity and its recurrence, the banks need to extend the period of repayment of restructured term loans ranging from 7 to 10 years with one year of moratorium.
Back to News Review index page