Cosmos Bank to open branch in Rajkot

Cosmos Bank has chalked out new strategy to enter into the lucrative banking market in Rajkot by opening its own separate branch. Earlier, the bank had planned to enter the city through merger and acquisition.

Talking to Business Standard, Shasikant Bugde, MD of Cosmos Co-operative Bank, Pune, said, "Initially, we will be on our own that is without going for any merger or acquisition. We do not want to rush after completing merger in Ahmedabad and Vadodara each. Cosmos had made substantial investment in these two acquisitions."

Bugde said, "We had planned to setup two of our branches at Rajkot by the end of July this year. Since we have got the permission from the RBI, we will shift one of our recently acquired branch in Ahmedabad to Rajkot."

Talking about opening second branch in Vadodara, he said Cosmos is in easy position to get the permission.

As per the new guideline of RBI, it falls under the A-grade category. "We will be investing around Rs 50 lakh for setting up both the branches in Rajkot," said Bugde.

However, he made it clear that the bank has not abandoned the option of merger and acquisition by saying, "We had received proposals from two to three small co-operative banks in Rajkot for merger."

"But currently we would like to concentrate and consolidate our Ahmedabad and Vadodara banking business," added Bugde.

He further said, "There is a gestation period involved in any acquisition, so we had planned to move in Rajkot on our own and later go for merger."

However, Cosmos bank would like to first understand the business culture in Gujarat and have a feeling about its potentiality of business and investing community.

"Talks with some of the co-operative banks are going on and we are making a sensible approach on the merger issue," said Bugde.

Moreover, the bank intend to go for merger in 2007, he added.

By the time it goes for merger in 2007, Cosmos Bank will be in better position to understand the specified requirement of its Rajkot customers as well as the gestation period of its new acquisition in Ahmedabad and Vadodara will be completed.

The bank also eyes the Rajkot-Kutch belt as an attractive destination for its banking business growth.