Abhyudaya Co-op to acquire A'bad bank

Signs MoU to take over Manekchowk Co-op.

Mumbai-based Abhyudaya Co-operative Bank (ACB) is all set to acquire Ahmedabad-based Manekchowk Co-operative Bank. A memorandum of understanding (MoU) to this effect has been signed.

Manjayya Shetty, managing director, Abhyudaya Co-operative Bank while confirming the development told Business Standard, "The MoU has been signed. The Reserve Bank of India, Gujarat, has given the go ahead for this acquisition and we are awaiting nod from the RBI central office."

Once the approval from RBI, Mumbai, comes through, ACB will place the proposal before the registrar of the bank, added Shetty.

Manekchowk bank has 11 branches and over 100 employees on its rolls.

Shailesh Shah, secretary of Manekchowk bank's employee union, said, "We welcome this merger as the employees would be absorbed by Abhudaya bank."

According to the MoU, the existing employees of Manekchowk bank would not be given any additional benefits like bonus and increment for a period of five years. Once this period is over, Abhyudaya bank would extend the benefits received by its own employees to those of Manekchowk bank.

Shah, who is also general secretary of Gujarat State Co-operative Bank Employees Federation, and secretary of All India Co-operative Bank Employees' Federation, said like many other banks the alleged co-operative banks' scam had affected Manekchowk too.

Sources in the co-operative sector say the management of Manekchowk bank was earlier in talks with Kalupur Co-operative Bank for merger. However, it did not materialise.

Meanwhile, Abhyudaya has got the RBI nod for the acquisition of Vadodara-based Krishna Co-operative Bank.

ACB with Rs 2,250 crore deposits and around 1.1 million depositors has also been granted approval to acquire Pune-based Citizen Co-operative Bank.

Within the next two years, it plans to add 28 branches, including 11 branches of Manekchowk bank, one branch of Krishna Co-operative Bank, five branches of Udipi Bank in Karnataka and 5 branches of the parent bank, which has already been approved by the RBI. Its current network consists of 53 branches.

According to Shetty, the paid-up share capital of ACB bank stands at Rs 38 crore and various revenue reserves make up Rs 623 crore.