Corporation Bank not to merge RRB with itself

14th March 2005: Corporation Bank has stopped proceedings for the merger of Chikmagalur Kodagu Grameena Bank with itself. The Board of Directors of Corporation Bank have reconsidered the said proposal and have revoked their earlier decision of merging the Regional Rural Bank, which it sponsors, with itself, the NSE was informed on Monday. Accordingly, the bank shall not be proceeding further in this matter, it said.

Centre begins talks with seven states on merger of rural banks

12th March 2005: The government has kicked off the merger exercise of the rural regional banks (RRBs). The finance ministry has initiated talks with seven states including Andhra Pradesh, Karnataka, Madhya Pradesh, Maharashtra and Rajasthan for merging the regional rural banks of these states. First, the government would merge the weak RRBs. “We want to complete the merger process of the RRBs in these states, in the first phase. We will then look at merging the RRBs of the other states,” a senior finance minister official said. He said the government would carry on the entire merger exercise in phases. The government would also conduct a detailed study on RRBs, before deciding on their merger.

Shamrao Vithal Co-op Bank speeds up for acquisitions

12th March 2005: Shamrao Vithal Co-operative Bank, the country’s second largest co-operative bank in terms of business, is pursuing at least three small healthy co-operative banks for acquisitions. These are Shriram Co-operative Bank in Nasik, having around 6-7 branches, Sauhadra Bank in Bangalore, having 11-12 branches and Mumbai-based Samasta Co-operative Bank with 8-10 branches. This comes in the wake of the bank withdrawing its application for acquiring the Maratha Mandir Co-operative Bank, South Indian Co-operative Bank and Nasik People’s Co-operative Bank.

According to Deepak Patil, the bank’s chief executive officer, “We are planning to acquire smaller banks having about 7-12 branches, but which are healthy or only slightly troubled, as we do not want to put a strain on our balance sheets.” However, even as he admitted that the bank was currently scouting for new targets, he refused to divulge any names. The bank has backed out from the proposal to acquire three beleaguered banks, as it does not want to take on their significant non-performing assets into its balance sheet.