Cosmos Bank throws in hat for Maratha Mandir

After merger with the stressed bank its NPA will go up by 10%

Cosmos Co-operative Bank Ltd has joined the fray with Saraswat Co-operative Bank to acquire the troubled Maratha Mandir Co-operative Bank.

"It has approached the Reserve Bank of India (RBI) and expressed its intentions to acquire the stressed bank," said banking sources.

Maratha Mandir Co-operative Bank and Cosmos Co-operative Bank have formed a joint merger committee which is formulating the merger details, said Mukund Laxman Abhyankar, director of Cosmos Bank.

The RBI had imposed directive on Maratha Mandir Co-operative Bank on account of deteriorating financial health. The directive implies freezing of their banking business.

"We have expressed our intentions to take over the troubled bank and have also communicated that Cosmos Bank is ready to absorb the entire staff of Maratha Mandir Bank and also protect their pay. We will retain the staff," said Abhyankar.

MMCB board has called for an annual general meeting on April 25 to seek shareholders' consent on the proposed merger with a co-operative bank.

Once the shareholder approval is received, the bank will submit the merger proposal to the central registrar of co-operative societies and the RBI for their approval.

Cosmos Co-operative Bank is a multi state co-operative bank with 41 branches and five extension counters in India spread across five states and in 10 major cities. The bank's net non-performing assets (NPAs) as on March 31, 2004, stood at 2.14 per cent.

During the period under review, its capital adequacy ratio stood at 16.40 per cent.

After the merger, the bank's NPA is expected to go up to around 10 per cent while the bank's capital adequacy ratio will be above the RBI stipulated limit of 9 per cent, said Abhyankar.