Reserve Bank of India (RBI) approves merger of Akola Merchant Co-operative Bank with Jalgaon Peoples Co-operative Bank
The Reserve Bank of India (RBI) has granted its approval for the amalgamation of Akola Merchant Co-operative Bank with The Jalgaon Peoples Co-operative Bank. This strategic move is set to be enacted from August 28, as announced by the central bank.
Under the first scenario, when the net worth of the UCB proposing to transfer its business to another UCB remains positive, and the UCB intending to acquire the business of the transferring bank commits to safeguarding the deposits of all the depositors of the transferring bank.
The second circumstance involves a UCB with a negative net worth, wherein the amalgamating UCB voluntarily assures the protection of all depositors’ funds from the transferring bank.
In the third situation, if the UCB’s net worth is negative and the amalgamating UCB guarantees the safeguarding of depositors’ funds from the transferring bank, supported by upfront financial assistance from the state government as part of the merger process, such proposals would also be considered.
The RBI’s proactive stance on overseeing amalgamations in the co-operative banking sector aims to enhance the stability and efficiency of these institutions. By facilitating strategic consolidations, the central bank seeks to fortify the resilience of co-operative banks and provide enhanced services to customers.
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