Monday, September 30, 2013

Co-operative banks again expanding to Gujarat

After Ketan Parekh scripted Madhavpura Bank scam in 2001 cooperative banking  in Gujarat had collapsed. But now, eight cooperative banks, mainly from Maharashtra,  have expanded their wings again in the state. Due to a ban on issue of new cooperative bank licences by Reserve Bank of India they have adopted the mergers and acquisitions (M&A) route.
Madhavpura Bank : Ketan Parekh  Inset
Gujarat had 351 banks operating before the scam. The number dropped to 232 banks after many were merged or liquidated.  According to Gujarat Urban Cooperative Banks Federation (GUCBF)  data, cooperative banks have 88.39 lakh depositors. The total deposit with them is estimated to be above Rs 23,700 crore. Net NPA is estimated to be below 1%.
After, set back due to scams, Pune based cosmos bank was first to dare to enter the state, in 2006. It acquired Cooperative Bank of Ahmedabad and Baroda-based Unnati Cooperative Bank.
Other entrants are  Abhyudaya Bank, Saraswat Bank, Shamrao Vithal Bank, New India Cooperative Bank and TJSB Sahakari Bank, all from Maharashtra. Adarsh Bank is from Rajasthan.  Janata Sahakari Bank and Zoroastrian Cooperative Bank too are also poised for an entry.

Cooperative banks have now  equipped themselves with core banking solutions needed for the new age net banking.  They are stringently inspected by the RBI, under Section 35 of the Banking Regulation Act, 1979-AACS.

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