Relief for 8 Lakh Depositors: Saraswat Bank Acquires New India Co-operative Bank After ₹122 Crore Fraud

Saraswat Co-operative Bank Ltd (SCBL), India’s largest urban co-operative bank, has announced the acquisition of the financially strained New India Co-operative Bank Ltd (NICBL) following the latter’s exposure to a ₹122 crore fraud. This move brings relief to troubled depositors and aims for institutional revival.

Saraswat Bank’s Strategic Rescue 

SCBL has secured in-principle approval from the Reserve Bank of India for the merger with NICBL. The move comes after deposit withdrawal restrictions were placed on NICBL in February owing to governance failures. Saraswat Bank will absorb both assets and liabilities of NICBL, ensuring full protection to depositors. Chairman Gautam E. Thakur confirmed modalities are set for completion by August–September 2025, with turnaround expected in 1 to 2 years. A due diligence process and special audit are in progress to ensure transparency.

NICBL’s Financial Crisis and Governance Breach

NICBL endured a crisis sparked by a ₹122 crore scam allegedly orchestrated by a former official, leading to a negative net worth of ₹102.74 crore in FY25. With ₹2,397.85 crore in deposits and ₹1,162.67 crore as advances, the bank's total business stood at ₹3,560.52 crore. Approximately 90 of its 200 employees quit following the scandal. The RBI had earlier capped withdrawals at ₹25,000 per account, compounding depositor concerns.

Saraswat Bank’s Robust Financial Profile

SCBL reported a business volume of ₹91,814 crore in FY25, with ₹55,481 crore in deposits and ₹36,333 crore in advances. The bank booked a net profit of ₹518.25 crore for the year and maintained gross NPAs at 2.25% while completely eliminating net NPAs for the 3rd consecutive year. Its capital-to-risk-weighted assets ratio (CRAR) stood firm at an impressive 17.43%.

Read More: Honasa Consumer Share Price in Focus as NCLT Clears Amalgamation with Fusion and Just4Kids! 

Reducing 8 Lakh Depositors 

Saraswat Bank has a history of successfully acquiring more than 7 financially weak co-operative banks, rescuing over 8,00,000 depositors. In the past 5 years, it has grown the combined business of these acquired entities has grown from ₹1,900 crore to ₹9,200 crore. Notably, depositors in all previous acquisitions faced no haircut, reinforcing SCBL’s reputation as a safety net for troubled banks.

Conclusion

This merger reinforces Saraswat Bank’s leadership in ensuring co-operative banking stability in India. With strong financials and a commitment to depositor safety, SCBL steps in to rescue NICBL, paving the way for institutional correction and long-term recovery.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities are subject to market risks. Read all related documents carefully before investing.