In a major development for India’s co-operative banking sector, Saraswat Co-operative Bank has voluntarily proposed to merge New India Co-operative Bank with itself. This merger, pending regulatory approval from the Reserve Bank of India (RBI) and consent from shareholders of both banks, aims to protect depositors’ funds and stabilize the financial health of New India Co-operative Bank.
This move follows the RBI’s February restrictions on New India Co-operative Bank after a ₹122-crore embezzlement scandal involving senior management. The RBI also appointed an administrator to oversee its operations. Despite the scandal, officials noted that the bank’s collection efficiency has improved significantly, and its ₹1,100 crore loan book remains primarily retail-oriented.
Saraswat Bank Chairman Gautam Thakur confirmed that the merger is expected to be completed by August or September. While there may be some short-term impact on Saraswat’s asset quality and capital adequacy, he expressed confidence in a full recovery within 1–2 years.
As India’s largest urban co-operative bank, Saraswat has a strong track record of absorbing troubled co-op banks, merging seven so far without any depositor losses. Thakur emphasized that no depositor from New India Co-operative Bank will face a haircut, and all funds will be fully accessible after the merger.
Saraswat Bank is also planning to expand by adding 40–45 new branches, including the existing 27 from New India Co-operative Bank, with plans to enter states like Rajasthan.
Despite its growth, Saraswat Bank has no ambitions to convert into a universal bank and aims to remain a leading force in urban co-operative banking.
As of March 31, 2025, Saraswat Bank held ₹55,481 crore in deposits, ₹36,333 crore in advances, and reported a net profit of ₹518.25 crore, with gross NPAs at 2.25% and net NPAs at zero for the third year running. Its capital adequacy ratio stood at a strong 17.43%.
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