RBI consents To NCBL And Cosmos Co-Operative Bank’s Merger

RBI Consents To NCBL And Cosmos Co-Operative Bank’s Merger

Earlier, the Central Bank imposed a penalty on Maharashtra’s bank for violating certain norms

The Reserve Bank of India (RBI) has approved the amalgamation of the National Co-operative Bank Ltd (NCBL), Bangalore, Karnataka, with Cosmos Co-operative Bank Ltd, Maharashtra.

Effective 06 January 2025, the branches of NCBL will operate as Cosmos branches.

The scheme has been sanctioned in exercise of the powers conferred under Sub-Section (4) of Section 44A read with Section 56 of the Banking Regulation Act, 1949.

Earlier, the RBI had imposed a Rs.8.30 lakh penalty on Cosmos for violating certain regulations. The bank had levied foreclosure charges on floating rate term loans, sanctioned to certain individual borrowers.

The RBI’s statement read, "The statutory inspection of the bank was conducted by the RBI with reference to its financial position as on 31 March 2023. Based on the findings of non-compliance with directions and related correspondence, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed on it for failing to comply with the directions.

It added, “After considering the bank's reply and oral submissions during the personal hearing and examination of additional submissions, RBI found, inter alia, that the charge against the bank was sustained, warranting imposition of a monetary penalty.”