Saraswat Co‑operative Bank, India’s largest urban co‑operative bank, has announced a voluntary merger with the embattled New India Co‑operative Bank (NICB). The proposal, revealed by chairman Gautam Thakur alongside NICB’s RBI‑appointed administrator Shreekant, is designed to fully protect the savings of NICB’s roughly 1.2 lakh depositors—no haircuts—while restoring their access to funds, currently capped at ₹25,000 per account .

Thakur underscored the bank’s strong track record in rescuing distressed co‑operative banks (seven prior mergers) and believes the amalgamation is both viable and timely. Subject to shareholder approvals and RBI clearance, the merger could be completed by August–September 2025 .

The merger process entails Saraswat absorbing all assets and liabilities of NICB, with NICB shareholders receiving Saraswat shares at a predetermined ratio . Although some immediate strain may be felt on Saraswat’s balance sheet—given the impact of NICB’s recent ₹122 crore fraud scandal—the bank, which boasts assets over ₹36,000 crore, is confident it can integrate NICB’s ₹1,100 crore loan portfolio smoothly .

This strategic move aims to stabilize NICB operations and expand Saraswat’s reach—by adding NICB’s 27 branches and planning 40–45 new locations—potentially increasing its balance sheet to cross ₹1 lakh crore by FY26 .

sources