TJSB Sahakari Bank could emerge as a white knight for the fraud-hit New India Co-operative Bank (NICB).
Thane (Maharashtra)-based TJSB, which is India’s fifth-largest urban co-operative bank (UCB), has commenced due diligence on Mumbai-based NICB for a deal, which may result in a voluntary amalgamation of the latter with the former, according to banking sector sources.
If the aforementioned amalgamation goes through, it will be the second-biggest rescue of an UCB after the January 2022 amalgamation of the scam-hit Punjab and Maharashtra Co-operative Bank (PMC Bank) with Unity Small Finance Bank.
Fund misappropriation
NICB got into a tight spot in February 2025 after misappropriation of funds aggregating ₹122 crore was detected during RBI inspection.
PMC Bank got into trouble in 2019 due to a massive ₹6,500 crore scam perpetrated by a Mumbai-based real estate developer.
Besides misappropriation of funds, loans given by one of NICB’s Surat-based branches to entities based in Uttarakhand, Odisha and Delhi are being closely examined as part of the due diligence exercise, the sources said.
Further, if an amalgamation does come about, it will be without any haircut to NICB depositors.
When RBI issued Directions to NICB on February 13, it underscored that eligible depositors would be entitled to receive deposit insurance claim amount of their deposits up to ₹5 lakh. This claim will be based on submission of willingness by the depositors concerned and after due verification.
As per the directions, which will remain in force for six months, the bank cannot, without RBI’s prior approval in writing, grant or renew any loans and advances, make any investment, incur any liability, including borrowing of funds and acceptance of fresh deposits, among others.
RBI nod for other mergers
TJSB has 150 odd branches across Maharashtra, Goa, Karnataka, Gujarat, and Madhya Pradesh. As at March-end 2025, the bank had a total business (deposits plus advances) of ₹23,105 crore.
In February 2025, RBI had approved the voluntary amalgamation of The Citizen Co-operative Bank (Vasco-De-Gama, Goa) with TJSB. In 2007-08, the Central bank had greenlit the merger of two Pune-based UCBs – Navjeevan Nagri Sahakari Bank and Shree Sadguru Jangli Maharaj Sahakari Bank with TJSB.
NICB has 28 branches spread across Maharashtra (Mumbai, Thane & Palghar districts, Navi Mumbai, and Pune) and Gujarat (two branches in Surat). As on March-end 2024, the bank had deposits and advances aggregating ₹2,436.37 crore and ₹1,174.84 crore, respectively.