In a major development, the Reserve Bank of India has approved the voluntary amalgamation of beleaguered Mumbai based Maratha Sahakari Bank with the second largest urban cooperative bank of India i.e. Pune headquartered Cosmos Cooperative Bank.
The press release issued by RBI on Friday reads, “The Reserve Bank of India has sanctioned the Scheme of Amalgamation of Maratha Sahakari Bank Ltd., Mumbai, Maharashtra with The Cosmos Co-operative Bank Limited, Pune, Maharashtra”.
All the branches of Maratha Sahakari Bank, Mumbai will function as branches of The Cosmos Co-operative Bank Limited, Pune (Maharashtra) with effect from May 29, 2023, according to the press release. “The Scheme has been sanctioned in exercise of the powers conferred under Sub-Section (4) of Section 44A read with Section 56 of the Banking Regulation Act, 1949. The Scheme will come into force with effect from May 29, 2023, reads the release.
It bears recall that for a long time the depositors of Maratha Sahakari Bank had been urging the RBI to merge the bank with the Cosmos Cooperative Bank. The Indian Cooperative also received scores of mails from the depositors seeking merger with the Cosmos Bank. It is learned that there are about 65,000 depositors and the majority of them are senior citizen depositors whose hard-earned money is stuck in the bank.
It is gathered that the Maratha Sahakari Bank received a proposal from the Cosmos Cooperative Bank for amalgamation of its entity on 14th Jan 2021 and the merger proposal was placed before members in the AGM held on 25 November 2021. The said merger proposal was approved by 99 percent of members of the Maratha Sahakari Bank in the meeting.
It bears recall that the bank earned a net profit of Rs 3.81 crore during the 2021-22 FY and had accumulated losses of Rs 52.43 crore as on 31st March 2022. As on 31st March 2022, the bank’s net worth was Rs (-) 23.59 crore.
The RBI imposed the direction on the bank w.e.f. 31.08.2016 and since then the banking operations had come to a standstill and the bank was not able to accept fresh deposits and make fresh/new advances from that date. RBI had been making extension to directions u/s 35A from time to time and the last extension has been given till 31 May 2023.
In its recently held AGM, Cosmos Bank had hinted at the likely merger of the Maratha Sahakari Bank with itelf. This merger will help Cosmos spread its business in the City of Mumbai in a big way, said a source close to the UCB. Cosmos Bank has performed impressively yet again this year by registering net profit of Rs 151 crores.