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Shivalik Mercantile Co-operative Bank Allowed Transition To SFB

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On Monday, the apex banking body RBI allowed transition of UP-based Urban Cooperative bank Shivalik Mercantile Co-operative Bank Ltd to transform into a small finance bank. This shall be the first cooperative bank to effect the conversion since the time ruling came out to this effect.

Shivalik Mercantile Co-operative Bank Allowed Transition To SFB
 

In a notification, RBI said, "The Reserve Bank of India has today granted in-principle approval to Shivalik Mercantile Co-operative Bank Ltd (the applicant) for transition into a small finance bank under the scheme on voluntary transition of urban co-operative bank into a small finance bank issued on September 27, 2018".

For the transition, the bank is given 1.5 years time for compliance as per which banks need to have a minimum net worth amounting to as much as Rs. 50 crore and capital to risk (weighted) assets ratio of 9% and above. Furthermore they need to adhere to on-tap licensing of SFBs as per which they need to maintain a minimum net worth of as much as Rs. 100 crore from the date of commencement of banking operations.

Also, for the SFBs they need to have minimum CAR of 15% of its risk-weighted assets on a continuing basis and get on to increase the minimum paid up voting equity to Rs. 200 crore within 5 years of business commencement.

The bank started as a district level bank with only a single branch in Saharanpur, UP and started its operations way back in 1998. And then after acquiring a loss making bank in MP, it got its status as a multi-state bank. The bank is the largest urban cooperative bank in UP.

GoodReturns.in

Story first published: Tuesday, January 7, 2020, 6:09 [IST]
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