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Canara Bank to take over Amarnath Coop Bank

Canara Bank is in the final stage of taking over Amanath Cooperative Bank, with the Karnataka government all set to issue a gazette notification soon. The cooperative bank has outstanding loans of the order of Rs 165 crore. The4 bank, started in January 1977 with 3,000 members, became a scheduled bank in January 2000. It has been facing the unwieldy NPAs and during mid 2013, the RBI had to step in to freeze its operations, leading to a cascading effect on its small-time depositors. Canara Bank will be taking a minor hit on this merger given the context that capital has completely eroded and it will have to service the Rs 396 crore worth of deposits from around 200,000 depositors. There is an ongoing judicial process at the Karnataka High Court and pending a decision, Canara Bank will not be able to take decision on the integration. Canara Bank is looking at how to leverage the depositors’ base to take its financial inclusion model further given the context that Amanath has 15 branches in various districts of Karnataka.

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