Page 19 - Banking Finance June 2025

ploring the possibility of acquiring the
troubled New India Co-operative Bank,
which has been reeling under the im-
pact of a major fraud. Sources indicate
that the move is in its early stages,
with due diligence currently underway.
New India Co-op Bank, which has
Ò»©­ faced significant financial stress due to

alleged fraudulent transactions, has
been under scrutiny by the Reserve
Bank of India (RBI). To protect deposi-
tors and maintain financial stability, the
RBI has imposed restrictions on the
bank under the Banking Regulation
Act.
Sree Thyagaraja Co-op Bank Chairman Honoured
If the merger materializes, it could
with Prestigious Award offer a lifeline to the beleaguered bank
In a significant recognition of his contributions to the cooperative banking and its depositors, while expanding
sector, K. Subramanya Sharma, Chairman of Sree Thyagaraja Co-opera- TJSB's presence and customer base.
tive Bank, has been conferred with the prestigious "Best Co-operator TJSB, a well-established multi-state
Award" by the Federation of Karnataka State Co-operative Banks Ltd cooperative bank with a strong finan-
(Karnataka Apex Bank). The award was presented during a special event cial foundation, may help restore con-
organized on the occasion of Co-operative Week Celebrations at Dr. B.R. fidence in the cooperative banking sec-
Ambedkar Bhavan, Bengaluru. tor if it successfully revives New India
Co-op Bank.
The ceremony was attended by several dignitaries, including Karnataka's
Minister for Co-operation K.N. Rajanna, who praised Sharma's leadership RBI Cancels Licence of
in promoting sound banking practices and community development. Un-
der Sharma's guidance, Sree Thyagaraja Co-op Bank has consistently dem- HCBL Co-op Bank Over
onstrated strong financial discipline and inclusive growth, earning admi- Capital and Earnings Defi-
ration from both customers and cooperative peers.
ciencies
This honour highlights Sharma's steadfast commitment to cooperative val-
The Reserve Bank of India (RBI) has
ues and his impactful role in enhancing the stature of urban cooperative
revoked the banking licence of HCBL
banks in Karnataka.
Co-operative Bank, based in Lucknow,
citing the bank's inadequate capital
Allow Urban Co-op Banks changes to attract more investors. The and earnings prospects. The regulator
paper suggests permitting UCBs to of- stated that the bank lacked sufficient
to issue share certificate fer loans to Perpetual Non-cumulative financial strength to sustain opera-
To strengthen Urban Co-operative Preference Shares (PNCPS) investors, tions, making it incapable of meeting
Banks (UCBs), a discussion paper by the up to certain limits, to make these in- its obligations to depositors.
Reserve Bank has proposed to allow vestment options more appealing. As a result, the bank is no longer per-
them, especially larger ones, to issue mitted to conduct banking activities,
'Special Share Certificates' (SSCs) that TJSB Sahakari Bank May including accepting deposits or repay-
can be counted as core capital but ing existing ones. The RBI emphasized
won't have voting rights. Step In to Rescue Fraud-
that allowing the bank to continue
They can be traded on the bank's Hit New India Co-op Bank operations would be detrimental to
website or, eventually, stock ex- TJSB Sahakari Bank is reportedly ex- the interests of its depositors.

BANKING FINANCE | JUNE | 2025 | 17