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RBI Approves Merger of New India Co-operative Bank with Saraswat Bank, Effective August 4, 2025.

Banking & Finance | Dated: 04 Aug 2025

The Reserve Bank of India (RBI) has sanctioned the voluntary merger of New India Co-operative Bank Ltd (NICBL), based in Mumbai, with the country's largest urban co-operative lender, Saraswat Co‑operative Bank Ltd. The integration takes effect on 4 August 2025, with all branches converting under the Saraswat banner.

🎯 Key Highlights:

  • - The amalgamation, sanctioned under Section 44A(4) read with Section 56 of the Banking Regulation Act, 1949, marks a pivotal consolidation in the cooperative banking sector. Following shareholder approvals in July 2025, the merged entity will fully absorb NICBL’s customer base, assets, and liabilities—and convert all 27 NICBL branches into Saraswat Bank outlets from 4 August 2025.
  • - Saraswat Co‑operative Bank, headquartered in Mumbai, commanded a total business of around ₹91,814 crore as of March 2025, including ₹55,481 crore in deposits and ₹36,333 crore in advances. This scale vastly overshadows NICBL, whose total business stood at approximately ₹3,560 crore, with deposits ranging from ₹2,250–2,400 crore and advances of ₹1,100–1,162 crore.

💡 Other Important Facts:

  • (i) NICBL had come under regulatory scrutiny in February 2025, following the disclosure of a ₹122 crore embezzlement scandal involving senior executives. The RBI subsequently imposed a moratorium, froze withdrawal and lending operations, and appointed an administrator to oversee the bank’s affairs. The merger is seen as a remedy to protect depositors and restore operational stability.
  • (ii) Saraswat Bank's Chairman, Gautam E. Thakur, reiterated assurances that customer deposits and accrued interest would remain fully intact, with no haircut imposed. He further explained that despite NICBL’s negative net worth of ₹102.74 crore, Saraswat Bank’s robust capital adequacy ratio of 17%+ and strong financial health enable it to absorb the impact, expecting recovery within 12–24 months.

📚 Test Your Knowledge:

Recently, which bank has received the Reserve Bank of India's approval to merge with New India Co-operative Bank Ltd (NICBL)?

Correct Answer: Saraswat Co-operative Bank

🚀 Quick Recap: