Kochi, Jan. 24
HAVING obtained the necessary clearances from the Government, Federal Bank is all set to take over the Ganesh Bank of Kurundwad on Wednesday.
With this acquisition, Federal Bank will make inroads into the sugarcane growing and predominantly agricultural regions of Sangli and Kolhapur in Maharashtra.
Ganesh Bank of Kurundwad has a network of 32 branches: 24 in Maharashtra and eight in Belgaum, north Karnataka. With this amalgamation, Federal Bank's branch network in these States will increase to 65.
Federal Bank, which has 330 branches in Kerala and 127 branches spread over other States, has been looking at opportunities to grow inorganically. It has been looking at various avenues to expand its branch network outside Kerala, and expand its channels of delivery.
The merger is a perfect fit, in line with the growth strategy of Federal Bank, since all the 32 branches of the Ganesh Bank, barring a couple, are located in centres where Federal Bank does not have a presence. Given its thrust to advances to agricultural and small and medium enterprises, Federal Bank said that it considers the Konkan belt as a potential growth centre.
The addition of these branches will take the total branches of Federal Bank to 489. It is slated to open 15 branches before the end of the fiscal, which will take the total branch network to 504.
The RBI had put Ganesh Bank of Kurundwad under moratorium on January 7, as its networth had turned negative. Ganesh Bank was also unable to come up with any credible plan to raise fresh capital and its banking operations were frozen.
With their insight into banking operations in the heartland of Maharashtra and Karnataka, Federal Bank was confident that the staff of Ganesh Bank would do remarkably good business in expanding operations into these regions. Federal Bank has also made arrangements to take total control of Ganesh Bank's branches and head office.