RBI approves amalgamation of The Suvikas People’s Co-op Bank and The Kalupur Commercial Co-op Bank

On March 23, 2021, the central bank issued a master direction for the amalgamation of urban cooperative banks

The Reserve Bank of India (RBI) on October 13 said it has approved the voluntary amalgamation of The Suvikas People’s Co-operative Bank with The Kalupur Commercial Co-operative Bank.

The scheme will come into force with effect from October 16, a release issued by the central bank said.

The RBI further said the branches of The Suvikas People’s Co-operative Bank Limited, Ahmedabad (Gujarat) will function as branches of The Kalupur Commercial Co-operative Bank Limited, Ahmedabad (Gujarat) with effect from October 16, 2023.

On March 23, 2021, the central bank issued a master direction for the amalgamation of urban cooperative banks.

As per the directions, the RBI may consider proposals for merger and amalgamation under three circumstances, including when the net worth of the amalgamated bank (the UCB, which proposes to transfer its business to another UCB) is positive and the amalgamating bank (the UCB, which is to acquire the business of the amalgamated bank) assures to protect entire deposits of all depositors of the amalgamated bank.

The second circumstance for considering proposals is when the net worth of the amalgamated bank is negative and the amalgamating bank on its own assures to protect deposits of all the depositors of the amalgamated bank.

The third circumstance is when the net worth of the amalgamated bank is negative, and the amalgamating bank assures to protect the deposits of the depositors of the amalgamated bank with the financial support from the State government extended upfront as part of the process of the merger.