MSC Bank sends proposals to RBI for merging with City Co-op & Rupee Co-op

The Maharashtra State Cooperative Bank (MSC) has announced that for the purpose of merging City Co-operative Bank and Pune-based Rupee Co-operative Bank with itself, it has sent two separate proposals to RBI. The merger will require nearly Rs 1,300 crore of capital.

“The genesis of the proposals is the bank’s desire to de-risk beyond the agricultural industry by serving the retail segment,” said Vidyadhar Anaskar, chairperson of MSC Bank. A merger with the two cooperative banks will give MSC Bank a retail heft both in distribution and assets, he said.
“MSC Bank is confident that the RBI will give it the go-ahead on both the mergers in about four months,” Anaskar said.

“Those with up to Rs 1 lakh in City can withdraw 20 per cent of these deposits once every two months. These depositors will get their entire money back in five instalments in the first year. They will get interest of 6.50 per cent from the date of the merger or the applicable rate of interest for oneyear deposit, whichever is higher. Depositors above Rs 1 lakh will get their money in the next five years, in instalments, but they can avail loan facilities against their deposits. After maintaining sufficient margin as per the guidelines of the MSC Bank, this facility will be made available to the depositors,” Anaskar said.