Jalgaon Peoples Co-operative Bank & Akola Merchant Co-operative Bank merger approved by RBI

With effect from August 28, the branches of Akola Merchant Co-operative Bank will operate as branches of The Jalgaon Peoples Co-operative Bank, according to an announcement from the RBI.

On August 25, the Reserve Bank of India (RBI) announced that it had approved the merger of The Jalgaon Peoples Co-operative Bank and Akola Merchant Co-operative Bank. The central bank announced in a release that the program will go into action on August 28. With effect from August 28, the Akola Merchant Co-operative Bank branches would operate as branches of The Jalgaon Peoples Co-operative Bank, the notification noted. The merger of Twin Cities Co-operative Urban Bank Ltd and Kranti Co-operative Urban Bank Ltd was also given the go-ahead by the central bank earlier this week. The central bank issued a master directive for the consolidation of urban cooperative banks on March 23, 2021.

The RBI may take into account applications for merger and amalgamation under three conditions, per the instructions. First, when the combined bank (the UCB that proposes to sell its business to another UCB) has a positive net worth and the acquiring bank (the UCB that will take over the combined bank’s operations) guarantees to protect the full deposits of all combined bank depositors. Second, the situation in which proposals should be taken into account is when the combined bank’s net value is negative and the combining bank alone guarantees to protect the deposits of all the combined bank’s depositors. Third, if the combined bank’s net worth is negative and it guarantees to protect depositors’ funds with financial assistance from the state government provided up front as part of the merger procedure.

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