Saraswat Co-operative Bank announces intent to merge New India Cooperative Bank into itself

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Saraswat Co-operative Bank has officially announced its intent to merge New India Cooperative Bank Ltd.1 (NICBL) into itself. This was confirmed at a press conference held today, July 1, 2025, in Mumbai.

Key details of the merger:

  • In-principle RBI Approval: The merger has received in-principle approval from the Reserve Bank of India (RBI).2 Final approval will depend on the shareholders of both banks.3
  • Protection for Depositors: Saraswat Bank Chairman Gautam E.4 Thakur has assured that the interests of all depositors of New India Co-operative Bank will be fully protected, and there will be no “haircut” on their deposits.5 Depositors will be able to access their full funds once the merger is complete.6
  • Timeline: The merger process is expected to be completed by August-September 2025.7
  • Reason for Merger: New India Co-operative Bank has been facing a crisis, including a ₹122 crore embezzlement scam that led to the RBI imposing restrictions and appointing an administrator in February 2025.8 The bank reported a negative net worth of ₹102.74 crore for FY25.
  • Saraswat Bank’s Role: Saraswat Bank, India’s largest Urban Co-operative Bank, has a strong track record of merging with and reviving financially weak cooperative banks.9 This will be their eighth such acquisition, having previously rescued over 800,000 depositors without any loss of funds.
  • Integration and Turnaround: Saraswat Bank will take over all assets and liabilities of New India Co-operative Bank.10 While a special audit and due diligence have been conducted, it is estimated that the turnaround of the fraud-hit bank might take one to two years.
  • Branch Network and Employees: Saraswat Bank plans to absorb as many of the remaining 200 NICBL employees as possible after evaluation, but those involved in the fraud will not be retained. The merger will also add NICBL’s 27 branches to Saraswat Bank’s network.11

This merger is seen as a significant step towards strengthening the urban cooperative banking sector through consolidation and ensuring the stability of financial institutions.12

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