The beleaguered Pune based Urban Cooperative bank, Rupee bank is shuttling from one suitor to another even as RBI’s deadline for merger got extended for another six months. After Saraswat bank’s failed attempts, Allahabad Bank has shown keenness to take it under its arms.
In a communique Reserve Bank of India has extended the validity period of directions imposed on Rupee Co-operative Bank Pune for a further period of six months from February 22, 2014 to August 21, 2014.
The apex bank further says that the other terms and conditions remain unchanged. A copy of the direction dated February 03, 2014 notifying the above modification is displayed at the bank’s premises for the perusal of public.
RBI clarifies that the aforesaid modification by the Reserve Bank of India should not per-se be construed as cancellation of banking licence by RBI.
The bank will continue to undertake banking business with restrictions till its financial position improves. The Reserve Bank may consider modifications of these Directions depending upon circumstances.
Rupee Bank has a customer base of over six lakh and a network of 36 branches. Its deposits stand at Rs 1,425.5 crore and loan disbursement at Rs 628.5 crore. However, the bank’s non-performing assets till this date were worth Rs 357.06 crore and its accumulated loss was worth Rs 570.15 crore.
Kolkata-based public sector lender Allahabad Bank has evinced interest in acquiring the assets and liabilities of Rupee Cooperative Bank. Shubhlakshmi Panse, chairperson and managing director of Allahabad Bank, said the bank was interested in the proposal, adding it would like to scale up presence in Pune, which had a thriving middle class and immense business opportunities. Currently, Allahabad Bank has just six branches in Pune.
Earlier, Saraswat Cooperative Bank Limited, with an annual turnover of Rs 33,000 crore, had undertaken due diligence of Rupee Bank’s state of affairs in June 2013 and had submitted a proposal to the state department of cooperation. The bank had said that Rupee Bank’s balance sheet has realizable assets of Rs 996 crore and Saraswat Bank would bring in approximately Rs 110 crore as its own contribution. But the deal failed to take off.