The finance ministry may decide to merge two regional rural banks in Uttarakhand, the Uttaranchal Gramin Bank (UGB) and Nainital Almora Kshetriya Gramin Bank (NAKGB). The merger will be a step towards fulfillment of the ministry's process of amalgamation of regional rural banks (RRB's) across the country.
On the matter, a senior executive of UGB said, "The entity created through the merger would become the second largest bank in Uttarakhand, after the State Bank of India (SBI), in term of total branches." The proposed new bank (after the merger) will have a total of 228 branches and its total business will increase to Rs. 3100 crore, with SBI remaining its sponsor bank.
It is reported that UGB has a credit deposit (CD) ratio of 54.06 percent, which is two percent more than the average of CD ratios of all the banks in the state. It recorded profits to the tune of Rs. 8.71 crore in the last fiscal year. Similarly, NAKGB recorded net profits to the tune of Rs. 7.31 crore the previous fiscal.
On the matter, a senior official of the finance ministry said, "Since both the banks are making profits, the new entity will also do well."