RBI Approves Merger of National Co-operative Bank with Cosmos Co-operative Bank

On January 03 2025, the Reserve Bank of India (RBI) approved the merger of National Co-operative Bank Limited, Bengaluru (Karnataka) with Cosmos Co-operative Bank Limited, Pune (Maharashtra), effective from January 6, 2025.

• The RBI sanctioned the Scheme of Amalgamation of the banks in exercise of the powers conferred under Sub-Section(4) of Section 44A with Section 56 of the Banking Regulation Act, 1949.

Key Points:

i.With this merger, all branches of the National Co-operative Bank, which include 12 in Bengaluru (Karnataka) and 1 in Mysore (Karnataka), will now operate as branches of Cosmos Co-operative Bank.

• In the Financial Year 2023-24(FY24), the Cosmos Bank had already merged with two Mumbai (Maharashtra) based banks, Maratha Sahakari Bank Limited (7 branches) & Sahebrao Deshmukh Sahakari Bank Limited (11 branches).

ii.In July 2023, RBI imposed certain restrictions on the National Co-operative Bank, limiting deposit withdrawals to Rs 50,000 per account & these restrictions were extended until January 24, 2025.

RBI Grants Approval to HDFC Bank for 9.5% stake Acquisition in AU Small Finance Bank

The RBI granted approval to Housing Development Finance Corporation(HDFC) Bank Limited to acquire up to a 9.5% stake in AU Small Finance Bank Limited, Kotak Mahindra Bank Limited(KMBL), and Capital Small Finance Bank Limited.

• The approval is valid until 1-year period, expiring on January 2, 2026.

i.This approval extends to HDFC Bank’s group companies, including HDFC Mutual Fund (MF), HDFC Life Insurance, HDFC ERGO General Insurance, HDFC Securities and HDFC Pension Management.

ii.HDFC Bank is allowed to purchase up to 9.5 % of the paid-up share capital or voting rights in AU Small Finance Bank, Kotak Mahindra Bank, and Capital Small Finance Bank to ensure its group entities’ aggregate holdings do not exceed the limit set by the RBI.

iii.The RBI Directions 2023 specify that “aggregate holding” includes shares owned by the bank, its affiliates, trustees, Mutual Funds(MFs), and promoter group entities.

About AU Small Finance Bank:
Managing Director (MD) & Chief Executive Officer (CEO)– Sanjay Agarwal
Headquarters- Jaipur, Rajasthan
Established-1996
Tagline- Chalo Aage Badhe

About Cosmos Co-operative Bank Limited:
Managing Director (MD)– Apekshita Thipsay
Headquarters- Pune, Maharashtra
Established-1906
Tagline- Say I’M banking and mean it!