Cosmos lead race to buy Suvarna Co-op
Cosmos Bank is the front runner to buy troubled Shree Suvarna Cooperative Bank. The bank, which was placed under a moratorium by the RBI, is now being run by an administrator. Saraswat Bank has also set its sights on Shree Suvarna.
“The administrator may convene a general body meeting this month-end and the acquisition issue will be raised there,” said Mukund Abhyankar, chairman, Cosmos Bank. The Pune-based multi-state co-op bank had offered to take over Shree Suvarna days before it was placed under moratorium.
If the merger proposal is approved by the shareholders of Shree Suvarna Bank, Cosmos will do a due diligence and then submit a formal proposal to the RBI. Around Rs 120 crore will have to be pumped in to revive the ailing bank.
So, one of the options that Cosmos is looking at is to run Shree Suvarna as a secondary unit. “While submitting the proposal to the RBI, we will suggest they let us run the loss-making bank as a separate unit until it reaps profit. We will look for a regular merger only after managing the bank for a while,” said Shashikant Bugde, managing director, Cosmos Cooperative Bank. Shree Suvarna has 12 branches — nine in Pune, two in Mumbai and one in Shripur.
Cosmos is also set to acquire two more UCBs — Manasa Cooperative Bank and Naroda Industrial Cooperative bank. These acquisitions will enable it to further expand in Andhra Pradesh and Gujarat. Shareholders of the Secunderabad-based Manasa Cooperative Bank have agreed to the merger. A formal proposal has been sent to the RBI in this regard.
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