Punjab mulls merger of district co-op banks to boost profitability
RBI to consider government's proposal to amalgamate 16 entities
Babushahi Network
Chandigarh, January 8, 2026:
The Punjab Government is all set to merge its district central cooperative banks with Punjab State Cooperative Bank (PSCB).
According a report of ‘The Tribune’ the move is expected to ensure capital adequacy, enhance competitiveness with larger commercial banks and reduce duplication of administrative costs.
Report disclosed that a delegation of officials from the state finance and cooperative departments, led by Finance Minister Harpal Cheema, met top officials of the apex regulatory bank in Mumbai over the past two days. During the meetings, they presented two proposals — one to amalgamate all 20 district central cooperative banks (DCCBs) with the PSCB, and another to amalgamate 16 district cooperative banks, excluding those in Jalandhar, Kapurthala, Nawanshahr and Hoshiarpur.
Report said that in view of ongoing litigation by the four above-mentioned DCCBs against the proposed amalgamation, the RBI is likely to consider the state government’s proposal to amalgamate only 16 DCCBs, whose general bodies have already passed resolutions for voluntary amalgamation with the PSCB. This will help create a mega bank by increasing capital strength and profitability. At present, the state government has to often infuse capital into these loss-making banks every time their CRAR (capital to risk weighted assets ratio) falls below 9 per cent,” said an official source. CRAR is critical for covering potential loan defaults or investment losses.