Shamrao Vithal gets RBI nod to buy 2 co-ops

Mumbai-based Shamrao Vithal Co-operative Bank (SVCB) has received permission from the Reserve Bank of India (RBI) to acquire two more cooperative banks "" Kolhapur's Mahavir Co-operative Bank and Bangalore's Sauhadra Co-operative Bank.

SVCB, a leading multi-state cooperative bank, recently completed the process of absorbing Nashik-based Saptashringi Co-operative Bank. SVCB plans to conclude acquisition of the two co-operative banks by October, 2006, bank chairman Suresh Hemmady said.

Hemmady said "after RBI imposed restrictions on co-operative banks opening new branches, we are left with no choice but to look for mergers with similar banks or acquire smaller or weaker banks as a growth driver."

Saptashringi Co-op Bank had two branches in Nashik. Mahavir Co-operative Bank and Sauhadra Co-operative Bank have 11 branches each. SVCB currently has a network of 48 branches across Mumbai, Pune, Aurangabad and Nashik in Maharashtra, in Bangalore and Goa.

In 2005-06, SVCB reported a 20 per cent increase in net profit to Rs 54 crore from Rs 45 crore a year earlier. The bank's target to achieve net profit of Rs 60 crore in 2006-07. The bank has 750 employees and 70,000 share-holders.