The Reserve Bank of India has approved the merger of New India Co-operative Bank with Saraswat Co-operative Bank, the central bank said in a press release on Friday.
"The scheme will come into force with effect from August 04, 2025 (Monday). All the branches of New India Cooperative Bank Ltd., Mumbai will function as branches of Saraswat Co-operative Bank Ltd.," the RBI said.
Last month, Saraswat Co-operative Bank had announced its voluntary proposal to merge the beleaguered New India Co-operative Bank with itself.
This merger has come as Saraswat aims to safeguard the interests of all depositors and ensure the stability of New India Co-operative Bank's assets and liabilities post-merger.
In February, the RBI had imposed strict restrictions on New India Co-operative Bank and appointed an administrator after a Rs 122-crore embezzlement scandal involving senior management.
While a fraction of New India Co-operative Bank's assets will transfer to Saraswat Bank, asset quality and capital adequacy ratio of the bank will take a hit in the near term.
However, Chairperson Gautam Thakur had addressed the media and said that he expects turnaround for the merged entity to be completed within one-to-two years.
He had also said that he expected Saraswat's balance sheet to cross Rs 1 lakh crore in the current financial year.
Saraswat Bank, India's largest urban co-operative bank, has a strong track record of supporting troubled co-operative banks.
As of March 31, 2025, the bank's deposits were at Rs 55,481 crore and advances at Rs 36,333 crore.
The lender's net profit was at Rs 518.25 crore, with gross NPAs at 2.25% and net NPAs at zero for the third consecutive year. The bank's capital to risk weighted assets ratio was at 17.43%.
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