Urban Co-op Bank set to merge with Cosmos Bank, Pune
Bhubaneswar: The state government has given its nod for merger of the loss making Urban Co-operative Bank, Bhubaneswar, with the Pune based Cosmos Co-operative Bank, official sources said on Monday. "The merger of the two banks will be completed in three to four months," Chief Secreatary B K Patnaik said adding deposits of about 13,000 investor would be protected.
Urban Co-operative Bank, Bhubaneswar, established in 1988, which had been sustaining loss since 2001, had meanwhile become defunct even though the investors had deposited about Rs 28 crore in the bank. The state government`s equity assistance of Rs 6 crore to revive the bank in 2007 had also failed, sources said.
Describing Cosmos Bank as a scheduled bank having its existence in six states like Maharastra, Madhya Pradesh, Andhra Pradesh, Karnataka, Gujarat and Tamil Nadu, Patnaik said depositors in Urban Co-operative Bank, Bhubaneswar would get back their deposit amount along with interest.
Besides protecting the depositors money, Cosmos Bank would also accommodate 32 of the 43 regular employees of Orissa Co-operative Bank, Bhubaneswar. There was no gurantee about the service of other 38 employees of Urban Cooperative Bank.
"The Bank wlll give priority to former employees of the Urban Co-operative Bank if it undertakes any recruitment in future," Patnaik said. While state government`s equity of Rs six crore had meanwhile grown to Rs 9 crore, the Urban Cooperative Bank also held bond worth Rs 4 crore besides assets of Rs 1 crore. The bank had unrecovered loan of about Rs 35 crore, sources said.