The Kapol Co-operative Bank Ltd has received the Reserve Bank of India's permission to open three branches in Ahmedabad and two branches in Surat.
The bank, which currently has 14 branches in Mumbai, is seeking to expand its branch network further in western India in the wake of it being conferred the status of a multistate scheduled bank.
"We are eyeing the two top cities in Gujarat for their business potential. We are also looking for presence in western Maharashtra," said K D Vora, chairman of Kapol Bank.
The bank is looking to have a presence in Gujarat, Surat, which is known for its textiles and diamond community.
Ahmedabad, on the other hand, is known as one of the key centres for the bullion trade.
The bank, which has a high capital to risk weighted assets (CRAR) of 28.18 per cent as against the minimum prescription of eight per cent for co-operative banks, has set a target of reducing its net non-performing assets from 9.92 per cent as of March-end 2002 to less than five per cent as of March-end 2003.
On the high CRAR, Vora said except for retail lending and investments in government securities, there were very limited avenues for deployment of funds.
