RBI nod sought to take over 2 Indore banks | india | Hindustan Times
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RBI nod sought to take over 2 Indore banks

india Updated: Oct 27, 2006 15:38 IST

NAGPUR NAGARIK Sahakari Bank Ltd (NNSB), a premier urban co-operative bank of Vidarbha, has sought an approval from the Reserve Bank of India (RBI) to acquire two Indore-based loss-making urban co-operative banks — Maharashtra Brahman Sahakari Bank (MBSB) and Hindu Nagarik Sahakari Bank (HNSB). If this happens, it will open an era of mergers and takeover in the banking sector in the State.

According to sources in the banking industry, the NNSB shareholders  passed resolutions for the acquisition of two banks after receiving  proposals from the two banks.

The MBSB, which has four branches, has a deposit base of around Rs 75 crore. The single-branch, HNSB, has a deposit base of some Rs 20 crore. Against this, NNSB has deposits of over Rs 400 crore. Sources claimed that both the cooperative banks took steps in this direction. They said that merger of the two Indore-based banks would have a negative impact of Rs 3 crore on NNSB’s balance sheet, which the bank plans to amortise over5 to 10 years and offset the loss against income tax liability.

The NNSB has a capital of Rs 8 crore and reserves of nearly Rs 470 crore. The NNSB is considering merger proposals from six more cooperative banks in Chhattisgarh and Madhya Pradesh. These banks have deposits ranging from Rs 5 crore to Rs 25 crore, with only three of them running in loss, sources added.