Page 16 - Banking Finance July 2024

Cosmos Co-op Bank halts entities. "The days of servicing those with effect from the close of business
who come to branches are over. The hours on June 19, 2024.
acquisitions; eyes organic focus is on reaching out to customers,
growth especially small businesses (those with On liquidation, every depositor would
be entitled to receive deposit insurance
After acquiring 18 urban co-operative loan exposures of below Rs 1 crore)," claim amount of his/her deposits up to
banks (UCBs) in the last 25 years, Pune- Kale said. a monetary ceiling of Rs 5 lakh only
based Cosmos Co-operative Bank is Cosmos Bank may adopt business prac- from Deposit Insurance and Credit
pausing on further buyouts and will be tices of small finance banks but does Guarantee Corporation (DICGC).
focusing on organic growth. not think there is a need for convert-
"As per the data submitted by the
The second largest UCB in the country ing into an SFB, he said. bank, about 87 per cent of the deposi-
has also ruled out conversion into a The UCB's net profit more than doubled tors are entitled to receive full amount
small finance bank, as the current ethos to Rs 384 crore for FY24 from Rs 151 of their deposits from DICGC," RBI said.
and structure of the bank are robust crore in FY23. Its loans rose to Rs
enough to expand business further. As on June 14, 2024, DICGC has already
15,192 crore in March 2024 from Rs paid Rs 230.99 crore of the total in-
"We are not going to actively look for 13,116 crore a year ago. The deposits sured deposits based on the willingness
acquisitions. The bank will first consoli- grew to Rs 20,216 crore from Rs 17,629 received from the depositors con-
date the setup and operations and crore at the end of March 2023. cerned of the bank. Giving details, RBI
grow the business," said Milind Kale,
chairman, Cosmos Bank, in media fi- RBI cancels licence of said the Mumbai-based cooperative
nancial results for FY24. bank does not have adequate capital
Mumbai-based The City and earning prospects.
So far, the bank has merged 18 small
co-operative banks into itself. Mumbai- Co-operative Bank "The bank with its present financial po-
based Maratha Sahakari Bank (with 7 The Reserve Bank cancelled the li- sition would be unable to pay its present
branches) and Sahebrao Deshmukh cence of The City Co-operative Bank, depositors in full," it said, and added that
Sahakari Bank (with 11 branches) Maharashtra for lacking adequate public interest would be adversely af-
merged into Cosmos Bank in the finan- capital and earning prospects. The fected if it is allowed to carry on its bank-
cial year ended March 2024. With Commissioner for Cooperation and ing business any further.
these mergers, the bank's branch Registrar of Cooperative Societies, Consequent to the cancellation of its
count in Mumbai has risen to 50. At Maharashtra has also been asked to licence, The City Co-operative Bank has
present, Cosmos has 170 branches issue an order for winding up the bank been prohibited from conducting the
across 7 states. and appoint a liquidator, RBI said.
business of 'banking' which includes,
Referring to small finance banks, Kale According to RBI, the cooperative bank among other things, acceptance of
said there is competition from these ceases to carry on banking operations deposits and repayment of deposits.

BANKING FINANCE | JULY | 2024 | 15