The Hindu Business Line : Saraswat Co-op Bank chalks out aggressive plans

As on December 31, 2005, the bank's total deposits were Rs 5,493 crore, advances were over Rs 3,000 crore and net profit was Rs 79 crore. For the financial year 2004-05 the bank is targeting a growth of 25 per cent, which is the same rate as some of the larger private banks.

SARASWAT Co-operative Bank, India's largest co-operative bank, which is targeting a total business of Rs 10,000 crore this fiscal, is spearheading a movement to change the image of the co-operative bank sector.

Among its aggressive plans include acquiring a private sector bank and is meeting a stronger competitor head on.

Mr S.K. Banerjee, Managing Director of the bank, said, "We want to change the image that co-operative banking sector is a sick sector."

With an eye for more expansion, the bank has amended its bylaws and its area of operation has been extended all over India, he said. The bank is in the final stages of acquiring Maratha Mandir Co-operative bank. The two other banks on its radar are a Bangalore-based co-operative bank and Ganesh Bank of Kurundwad in Maharashtra. In case of the Ganesh Bank, it is up against the Kochi-based Federal Bank, which is a stronger bank. But as Mr Banerjee said, "We have given a much better offer."

Bogged down by problems such as regulatory restraints on expansion and dual control, co-operative banks find themselves in a tight spot. Instances of several small banks being declared defunct due to bad management policies have reinforced the image that the entire sector is inefficient.

But there are areas and niche areas where co-operative banks can give their bigger counterparts in the private and public sectors a run for their money.

According to Mr Banerjee co-operative banks can grow in segments such as SME, micro-finance in urban areas and personal loans. "Bigger banks are not interested in small companies which require up to Rs 1 crore loans or in the tiny sector where units require Rs 20,000-25,000. We can also cater to those people who borrow money on credit cards and pay up to 2 per cent monthly interest."

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