DRAFT SCHEME OF AMALGAMATION OF

JAWAHAR SAHAKARI BANK LTD., HUPARI, DIST-KOLHAPUR (AMALGAMATED BANK)

WITH

KALLAPPANNA AWADE ICHALKARANJI JANATA SAHAKARI BANK LTD., ICHALKARANJI, DIST KOLHAPUR,

(AMALGAMATING BANK)

(This Scheme shall be part of the Merger Order to be issued by RBI/ Competent Authority/ Registrar of Co-op Societies)

1.       DESCRIPTION OF THE BANKS THAT ARE PARTIES TO THIS SCHEME

              Jawahar Sahakari Bank Ltd., Hupari, Dist-Kolhapur is a co-operative bank registered under Maharashtra Co-op Societies Act 1960 under registration No. KPR/HLE/BNK(O)-118 dated 15/03/1996. The Bank is having its registered office at Post Hupari, Taluka Hatkangale, Dist Kolhapur (hereinafter referred as Amalgamated Bank). Amalgamated Bank is granted license to carry the business of banking under the provisions of Banking Regulation Act 1949 (AACS) under licence No UBD.MAH.1285 P dated 24/09/1996. The area of operation of the bank is entire Kolhapur District.

              Kallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd., Ichalkaranji is a Multi-State Scheduled Co-operative Bank registered under Multi State Co-op. Societies Act 2002, under registration No MSCS/CR/437/2011 dt 15/09/2011. The Bank is having its registered office at Janata Bank Bhavan, Main Road, Ichalkaranji, 416115, Tal- Hatkangale, Dist Kolhapur (hereinafter referred as Amalgamating Bank). Amalgamating Bank is granted license to carry the business of banking under the provisions of Banking Regulation Act 1949 (AACS) under licence No ACD/MH/297/P/27.04.1982. The area of operation of the bank is whole state of Maharashtra, Karnataka and Goa

Both the Amalgamated Bank and Amalgamating Bank hereinafter shall be collectively referred to as ‘Parties’ and individually as ‘Party’

2.       OVERVIEW OF THE SCHEME

              This scheme represents amalgamation of Amalgamated Bank with Amalgamating Bank and subsequent dissolution of the Amalgamated Bank

              The date of Amalgamation shall be fixed by the Competent Authority (which shall be referred to as the “Said Date” or “Date of merger” or “Effective date”)

              Amalgamating Bank is desirous of taking over the banking operations of Amalgamated Bank as per RBI master directions No DOR.MAM.No 23/03/2021 called as Reserve Bank of India (Amalgamation of Urban Co-operative Banks) Directions, 2020 and circulars issued thereafter, if any.

3.       RATIONAL AND BENEFITS OF THE SCHEME

              Both the parties to the scheme are co-operative banks and are in the banking sector for several years. The Amalgamating bank is established in the year 1963 and just completed 60 years of banking in co-operative sector. Amalgamated Bank is also working prominently in the vicinity of Ichalkaranji where the head office of Amalgamating Bank is located. Both the banks believe that, by amalgamation of amalgamated bank with the amalgamating bank, there would be more benefits to the stakeholders of both banks and especially to the stakeholders of amalgamated bank

The amalgamation pursuant to the scheme would, inter alia, have following benefits

i.        The Amalgamation, through the scheme, shall enable amalgamating bank to build its loan portfolio of small ticket size and enhance its customer base;

ii.      The amalgamation is based on leveraging the significant complementarities that exists among the parties to the scheme;

iii.    The amalgamation would create meaningful value for various stakeholders including respective shareholders, customers, employees as the combined business would benefit from increased scale, wider product diversification, and ability to drive synergies across revenue opportunities, operating efficiencies and underwriting efficiencies, among others ;

iv.     Increased scale of balance sheet and loan assets as loan book will stand merged;

v.       Amalgamating bank is multi state scheduled bank and has presence in wider part of Maharashtra and Karnataka with 44 branches. This will benefit the customers of the amalgamated bank ;

vi.     Amalgamating bank is using latest CBS technology and cyber security tools and this will benefit the customers of amalgamated bank ;

vii.   Amalgamating Bank offers wide range of loan and deposit products as well as services such as ATM, RTGS, NEFT, Mobile banking, etc which is beneficial for the customers of Amalgamated Bank ;

viii. Amalgamated bank has small loan size upto Rs 50 lakhs and most of the loans are in priority and weaker sector. This will benefit Amalgamating Bank

to achieve small loan target as well as to further strengthen priority and weaker sector targets;

              The amalgamation would therefore, be in the best interest of shareholders of respective parties to the scheme and shall not in any manner prejudicial to the interests of concerned shareholders or creditors or general public at large ;

              Accordingly to achieve the abovementioned benefits, the Board of Directors of each of the parties have decided to make requisite applications before Reserve Bank of India and other Central/State authorities regulating the working of each of the parties;

              The Amalgamated Bank is having positive net worth as on 31st March 2023 as per Due Diligence and Amalgamating Bank assures to protect entire deposits of Amalgamated Bank through its own resources under this scheme;

              Therefore, the Amalgamating Bank and Amalgamated Bank have agreed to following terms and conditions

4.       DEFINITIONS:

In this Scheme, unless the context otherwise requires -

(a)         "Amalgamated bank" means ‘Jawahar Co-op Bank Ltd.’, a Cooperative Bank having its Registered Office at Post Hupari, Taluka Hatkangale, Dist Kolhapur

(b)        "Amalgamating Bank" means Kallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd (a Multi State Co-operative Bank registered under MSCS Act 2002 and having its Registered Office at Janata Bank Bhavan, Main Road, Ichalkaranji, 416115, Tal- Hatkangale, Dist Kolhapur).

(c)          “Amalgamated Bank Shares” means the fully paid-up equity shares of the Amalgamated Bank, each having a face value of Rs 100/- (Rupee One Hundred only) or Rs 1000/- (Rupee One Thousand only)

(d)         “Amalgamating Bank Shares” means the fully paid-up equity shares of the Amalgamating Bank, each having a face value of Re 50/- (Rupee Fifty only)

(e)         “Board” in relation to a Party, means the board of directors of such Party

(f)           “Competent Authority” means any governmental or statutory or regulatory or administrative authority, government department, agency, commission, board, tribunal or court or other entity authorized to make laws, rules or regulations or pass directions, having or purporting to have jurisdiction over any state or other sub-division thereof or any municipality, district or other sub-division thereof having jurisdiction pursuant to the Applicable Law, including the RBI, Central Registrar of Co-operative Societies, New Delhi, Registrar of Co-op. Societies, Maharashtra;

(g)        "Appointed Date 1” means the end of the day immediately preceding the Effective Date

(h)         “the Act” or “BR Act” means Banking Regulation Act 1949 (10 of 1949);

(i)           “Effective Date” means the date as may be referred by competent authority while granting approval/order of amalgamation under applicable Laws

(j)           “MSCS Act” means Multi State Co-operative Societies Act 2002 as amended from time to time

(k)          “MCS Act” means Maharashtra Co-operative Societies Act 1960 as amended from time to time

(l)           “Reserve Bank” or “RBI” means the Reserve Bank of India, constituted under the Reserve Bank of India Act, 1934 (2 of 1934).

(m)       "the Scheme" means the ‘Jawahar Co-op Bank Ltd. (Amalgamation with Kallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd) Scheme ;

(n)         “Swap Ratio” means value of a share that remain after adjustment of all liabilities, provisions and losses after considering net worth and other financial parameters of both parties

Words and expressions used here in and not defined but defined in the Act shall have the meaning respectively assigned to them in the Act.

5.       BOARD OF DIRECTORS

              The board of directors of Amalgamated Bank shall stand dissolved on the effective date and the management of Amalgamated Bank will be governed and administered by the Board and Management of Amalgamating Bank only

              No directors/ ex-directors of Board of Directors of Amalgamated Bank shall be taken on Board of Amalgamating Bank by virtue of the scheme of amalgamation. However, Amalgamating Bank may nominate any one or more members of the Board of Amalgamated Bank on the Board of Amalgamating Bank at its discretion and subject to provisions of applicable laws and approved bye-laws of Amalgamating Bank

6.       CLOSURE OF BOOKS OF AMALGAMATED BANK AND PREPARATION OF BALANCE SHEET

              The books of the Amalgamated Bank shall be closed and balanced and Balance Sheets prepared as at “Appointed Day 1”. i.e the close of business immediately preceding the “the effective date” and the balance sheet shall be got audited and certified by Chartered Accountant or a firm of Chartered Accountants appointed by the Amalgamating Bank.

              Board and top executives of Amalgamated Bank shall disclose full details for the preparation of true and fair financial statements as on Appointed Date 1

              A copy of each of the Balance Sheet of the Amalgamated Bank prepared in accordance with the provisions of the foregoing paragraph – shall be filed by the Amalgamated Bank, with the Competent Authority / Registrar of Co-op Societies and thereafter the Amalgamated Bank shall not be required to prepare Balance Sheets or Profit & Loss Accounts, or to lay the same before its members or file copies thereof with the Competent Authority / Registrar of Co- op Societies to comply with the provisions of MCS Act 1960 and rules thereunder or to hold any Annual General Meeting for the purpose of considering the Balance Sheet and Accounts or for any other purpose and it shall not thereafter be necessary for the Board Of Directors of the Amalgamated Bank to meet for any purpose whatsoever

              The Chairman, at least 2 directors and Chief Executive Officer of Amalgamated Bank shall sign the Balance Sheet and Profit and Loss Account prepared as on Appointed Date-1

7.       VALUATION OF ASSETS AND DETERMINATION OF LIABILITIES

                  The Amalgamating Bank has carried primary Due Diligence of Amalgamated Bank with its consultation to arrive at realisable value of assets and ascertain the liabilities of Amalgamated Bank and have agreed as under:-

a)       Investments including Government Securities shall be valued at the market rates prevailing on the day immediately preceding the said date or at the rate as prescribed by the Reserve Bank of India under investment guidelines, provided that the Securities of the Central Government such as Post Office Certificates, Treasury, Saving Deposit Certificates and any Other Securities of Certificate issued under the small savings scheme of the Central Government shall be valued at their face value or the en-cashable value, as on the said date, whichever is higher.

b)       Where the market value of any Government Security such as the Zamindari Abolition Bonds or other similar Security in respect of which the principal is payable in instalments, is not ascertainable or is for any reason not considered reflecting the fair value thereof or as otherwise appropriate, the security shall be valued at such an amount as is considered reasonable having regard to the instalments of principal and interest remaining to be paid, the period during which such instalments are payable, the yield of any Security issued by the Government to which the Security pertains and having the same or approximately the same maturity and other relevant factors.

c)        Where the market value of any security, share, debenture, bond or other investments is not considered reasonable by reason of its having been

affected by abnormal factors the investment may be valued as per the extant RBI valuation guidelines .

d)       Where the market value of any security, share, debenture, bond or other investment is not ascertainable, only such value, if any, shall be taken into account as is considered reasonable, having regard to the financial position of the issuing concern, the dividends paid by it during the preceding five years and other relevant factors.

e)       Cash at actual in hand and at ATM and bank balances shall be valued at book value

f)         Premises and all other immovable properties and any assets acquired in satisfaction of claims, shall be valued at their market value as per the report of valuer appointed by Amalgamating Bank

g)       Furniture and fixtures, Computers, Servers and other related Electronic equipment etc., stationery in stocks and other Assets, if any, shall be valued at the written down value as per books or the realizable value as may be considered reasonable.

h)       Loans & advances including bills purchased and discounted will be taken at book value along with provisions held there against on effective date

i)         When the valuation of any Assets cannot be determined on the said date, it may, with the approval of the Competent Authority be treated partly or wholly as an Asset realizable at a later date.

j)         All the liabilities including demand and time deposits (including interest payable thereon) will be valued at book value on effective date

k)        Liabilities for the purpose of this Scheme shall include all contingent liabilities which the Amalgamating Bank may reasonably be expected or required to meet out of its own resources on or after the effective date.

l)         In the event of any disagreement among the Auditors, the Amalgamated Bank and the Amalgamating Bank as regards the valuation of any Assets or the Classification of any Advance or the determination of any liability, the matter shall be referred to the Competent Authority whose decision shall be final, provided that until such decision is received, the valuation of the item or portion thereof divided by the Auditors shall provisionally be adopted for the purpose of this scheme.

m)     It shall be competent for the Competent Authority in the event of it is becoming necessary to do so, to obtain such technical advice as he may

consider to be appropriate in connection with the valuation of any such item of assets or determination of any such liability and the cost of obtaining such advice shall be payable in full, out of the assets of the Amalgamated Bank. Before finalizing the valuation of such assets or determination of liability. The Competent Authority shall hear the Amalgamating Bank with regard to their case of the valuation of such Asset or determination of the liability.

n)       The valuation of the Assets and the determination of the liabilities in accordance with the provisions of this scheme shall be binding on both the Banks and their members and Creditors thereof.

8.       TRANSFER AND VESTING OF ASSETS OF THE AMALAGAMTED BANK WITH THE AMALGAMATING BANK

              On and from the Effective Date, all rights, powers, claims, demands, interest, authorities, privileges, benefits, assets and properties of the Amalgamated Bank, (whether movable and immovable, tangible or intangible, lease or freehold), including premises subject to all incidents of tenure and rents and other sums of money and covenants reserved by or contained in the leases or agreements under which they are held, all office furniture, loose equipment, plant apparatus and appliances, servers, computers and all related hardware, etc., All books, records, files, papers, application software, software licenses (whether proprietary or otherwise), computer programmes, drawings, manuals, data, databases including databases for procurement, commercial and management, catalogues, quotations, sales and advertising materials, product registrations, dossiers, lists of present and former borrowers, lenders and suppliers including service providers, other borrower information, customer credit information, customer/supplier pricing information, and all other books and records, whether in physical or electronic form, stocks of stationery, other stocks and store, all investments in stocks, share and securities, all bills receivable in hand and in transit, all cash in hand and on current or deposit account (including money at call or short notices) with Banks, bullion, all book debts, mortgage debts and other debts with the benefit of securities of any guarantee therefore, all other, if any, property rights and assets of every description including all rights of action and benefits of all guarantees in connection with the business the “Amalgamated Bank” shall subject to the other provisions of this scheme, transferred to and become the properties and become the properties and assets of the “Amalgamating Bank”

              Without prejudice to the generality of the foregoing provisions, all licenses/registration, permissions, grants, subsidies, authorisations, certificates of the branches, regions, etc, received from RBI , Shop Act registration certificates, lease agreements and other licenses from State Government or other competent authorities, contracts, deeds, bonds, agreements, powers of attorney, grants of legal representation and other instruments of whatever nature subsisting or having effect immediately before the Effective Date shall be effective to the extent and in the manner hereinafter provided against or in

favour of the Amalgamating Bank and may be acted upon as if instead of the Amalgamated Bank, the Amalgamating Bank had been a party thereto or as if they had been issued in favour of the Amalgamating Bank.

9.       TRANSFER AND VESTING OF THE LIABILITIES OF THE AMALAGAMTED BANK WITH THE AMALGAMATING BANK

In consideration of the transfer of the Property and the Assets of the Amalgamated Bank to the Amalgamating Bank, the Amalgamating Bank shall discharge the liabilities of the Amalgamated Bank to the extent mentioned in this Scheme and the succeeding paragraphs.

           On and from the Effective Date, all the liabilities, contingent liabilities, debts, loans raised and used, duties, losses and obligations of the Amalgamated Bank, whether or not recorded in its books of accounts or disclosed in the balance sheet of the Amalgamated Bank, shall, without any further act, instrument, deed, matter or thing, stand transferred to and vested in the Amalgamating Bank to the extent they are outstanding on the Appointed Day 1 so as to become as and from the effective date the liabilities, debts, loans, duties and obligations of the Amalgamated Bank on the same terms and conditions as were applicable to the Amalgamated Bank and the Amalgamating Bank shall meet, discharge and satisfy the same and further it shall not be necessary to obtain the consent of any third party or other person who is a party to any contract or arrangement by virtue of which such liabilities, duties and obligations have arisen in order to give effect to the provisions of this Clause.

              If on the Effective Date any suit, appeal or other legal proceedings of whatever nature by or against the Amalgamated Bank is pending, the same shall not abate, or be discontinued or be in any way prejudicially affected, but shall, subject to other provisions of the Scheme, be prosecuted and enforced by or against the Amalgamating Bank.

Provided that where a contravention of any of the provisions of any act or of any rule, regulation, direction or order made there under has been committed by, and any proceeding for a criminal offence or any action has already been instituted against a director or secretary, manager, officer or other employee of the Amalgamated Bank before the Effective Date, such director, secretary, manager, officer or other employee shall, without prejudice to the application of section 6 of the General Clauses Act, 1897 (10 of 1897), be liable to be proceeded against under such law and punished accordingly as if the Amalgamated Bank, being a banking society had not been dissolved.

All the powers of attorney, letter of authorisations or similar instruments executed by the Amalgamated Bank shall, with effect from the Effective Date abate.

              It will be a prime responsibility of the Board and/or Chief Executive Officer of the Amalgamated Bank to disclose all types of liabilities and material information which may affect this Scheme to the Amalgamating Bank. Further, it will also be their responsibility to disclose to the Amalgamating Bank before the Effective Date, about any issue pertaining to disciplinary action against any of its employee, or any litigation against any property of the Amalgamated Bank or any property of borrowers etc.

              Treatment of depositors of Amalgamated Bank

i.        On and from the Effective Date, all the deposit holders of the Amalgamated Bank shall become the deposit holders of Amalgamating Bank

ii.      In respect of every Savings Bank Account or Current Account or any other deposit including a Fixed Deposit, Cash Certificates, monthly Deposit, Deposit payable at call or short notice or any other deposit by whatever name called, with the Amalgamated Bank and every other account including interest to the extent payable under this scheme, the Amalgamating Bank shall open with itself on the effective date a corresponding and similar account in the name of the respective holder (s) thereof, crediting thereto the amount of deposit as on the Effective Date

iii.    The saving bank account customers shall be given the interest at the rate as per rules of Amalgamating Bank from the Effective Date

iv.     All deposits of the Amalgamated Bank as on the effective date shall stand transferred to the Amalgamating Bank. With a view to protect the interest of the depositors of the Amalgamated Bank, the Amalgamating Bank shall pay interest on all term deposits (which are not matured as on effective date) at the Amalgamated Bank’s contractual rate till the date of maturity of the term deposits even after the effective date

v.       In case of term deposits which are matured till the effective date and not renewed even after effective date , interest at the saving rate (of Amalgamated Bank) shall be paid for the period from the date of maturity till Appointed Day 1 and interest at the saving rate (of Amalgamating Bank) shall be paid for the period from the Effective Date till date of payment of such deposit

vi.     In case of term deposits which are matured till the effective date, but renewed after effective date, interest rate as per prevailing rate and as per rules of Amalgamating Bank shall be given from date of such renewal. However, Amalgamating Bank shall give interest at saving bank rate for the period from date of maturity till the date of renewal

vii.   All the deposits of the Amalgamated Bank transferred to the Amalgamating Bank subsequent to the effective date shall be governed by the Rules and Regulations of deposits of the Amalgamating Bank. Before issuance of fresh

deposit receipts / certificates or passbooks or extract, the depositor shall comply with the KYC norms prescribed by the Reserve Bank of India.

viii. The fixed deposit holders of the Amalgamated Bank will be issued fresh fixed deposit receipts of the Amalgamating Bank on or after producing the original fixed deposit receipt of the Amalgamated Bank. In case of Recurring Deposits and Cash Certificates, the deposit amount plus interest thereon at the contracted rate of interest till the effective date, will be carried forward as deposits in the books of accounts of the Amalgamating Bank, subject to the compliance of KYC norms as specified by Reserve Bank of India.

ix.     Before allowing operations in the Savings Bank Accounts and Current Bank Accounts, and allowing withdrawal of term deposits, prematurely or otherwise, the customers shall comply with the KYC norms and other guidelines issued by the Reserve Bank of India from time to time.

x.       Amalgamating Bank shall issue fresh pass books and cheques books to saving account holders of Amalgamated bank after effective date

xi.     Amalgamating Bank shall issue new cheques books to current account holders of Amalgamated bank after effective date

xii.   The depositor of Amalgamated Bank shall have right to continue his/her deposit with Amalgamating Bank after effective date

However, Amalgamating Bank at request from depositors of Amalgamated Bank may allow withdrawal of term deposit before completion of period of the deposit agreed upon at the time of making deposit within one (1) month from effective date and in such case no penal interest/penal charges would be charged on premature withdrawal of time deposit pursuant to such decision by Amalgamated Bank’s depositors during said One month period

xiii. All the inoperative and dormant deposit accounts of Amalgamated Bank shall stand transferred to Amalgamating bank from effective date. Before making such deposit accounts operative, the customer shall fulfil KYC norms adopted by Amalgamating Bank. The Amalgamated Bank shall make every efforts to comply with KYC norms in case of dormant/ inoperative accounts before effective date.

xiv. In case of unclaimed deposit accounts transferred to Depositors Education and Awareness Fund Scheme 2014 (DEAF), the balance in DEAF of Amalgamated Bank shall stand transferred in the name of Amalgamating Bank. After effective date, any deposit claim of customers towards unclaimed deposits of Amalgamated Bank (which are transferred to DEAF) shall be ledged by Amalgamating Bank to RBI

10.   TREATMENT     OF     SHARE     CAPITAL     ,     SHAREHOLDERS     OF     THE AMALGAMATED BANK AND SWAP RATIO (SHARE EXCHANGE RATIO)

                           The share capital structure of the Amalgamated Bank as on March 31, 2023, was as under:

                           The share capital structure of the Amalgamating Bank as on March 31, 2023, was as under:

                           Both the parties are basically co-operative societies and thus are not listed on any stock exchange. Therefore the valuation of the Amalgamated Bank can not be arrived by valuation of market price of shares. Therefore it is agreed that, the Amalgamated Bank shall be valued by ‘Net Asset Value’ approach. In Net Asset Value approach, the valuation of assets is basically carried at Market Price or Net Realisable Value whichever is less. The valuation of liabilities is carried at book value and the estimated liabilities and provisions are taken into consideration. Detail valuation methodology is given in clause 7. The Net Asset value shall be arrived as difference between the such Assets and Liabilities. The Net Asset arrived shall be divided by number of shares issued by Amalgamated Bank to arrive at Value of each share of Amalgamated Bank.

                           The paid up share capital of Amalgamating Bank as per last audited financial statements as of 31st March 2023 is considered and the Book Value of each share of Amalgamating Bank is arrived by dividing Paid up share capital by the number of shares issued by Amalgamating Bank

                           The value of each share of Amalgamated Bank and Amalgamating Bank, as arrived as per clause 10.3 and 10.4 are compared to arrive at Swap Ratio (or Share Exchange Ratio). Swap ratio arrived as per primary Due Diligence of Amalgamated Bank and as per audited financials of Amalgamating Bank (as of 31st March 2023) is mentioned in Annexure A to this scheme.

                           As per primary due diligence, the net worth of Amalgamated Bank was positive. Therefore, it is primarily agreed that, the Amalgamating Bank shall issue its shares in lieu of shares held by the shareholders of

Amalgamated Bank, in consideration of takeover of assets and liabilities of Amalgamated Bank as mentioned in Annexure “A” and as mentioned below

                           However, it is also further provided that, the net-worth of the Amalgamated Bank shall be finally ascertained on Appointed Day 1 through the auditors appointed by the Amalgamating Bank. This will have to be done also in order to prepare the final Balance Sheet and Profit & Loss A/c of the Amalgamated Bank. The final swap ratio shall be ascertained as per methodology adopted in Clause 10.3, 10.4 and 10.5 above

                           In case the net-worth of the Amalgamated Bank as on the Appointed Day 1 is found to be —

                           'positive' to the extent of share capital, then the 'shareholders of the Amalgamated Bank will be entitled to get full refund of their respective share contribution in the Amalgamated Bank, without any interest/dividend, from the Amalgamating Bank.

                           'positive' but it is less than total share capital amount, then the shareholders of the Amalgamated Bank will be entitled to get refund of such depreciated price of their individual shareholding from the Amalgamating Bank.

                           'negative' then the shareholders of the Amalgamated Bank will not be entitled to get refund of their respective share contribution in the Amalgamated Bank from the Amalgamating Bank.

                           Refund of share capital in respect of 10.8.1 and 10.8.2 above shall be made within 90 days from the effective date. However, original share certificates given by the Amalgamated Bank will have to be surrendered for claiming refund of share money. If such original share certificate is not produced to claim refund, the member of the Amalgamated Bank will have to adhere to the prescribed norms and procedures of the Amalgamating Bank to claim such refund.

                           In the event of members who are not claiming the refund of share contribution they will be entitled to the shares of Amalgamating bank as per Clause 10.7, within period of 6 months from Effective Date after due compliance of KYC.

                           The dissenting shareholders of Amalgamated Bank (who are not assenting to the scheme) shall have option to get the refund of their share capital at

the value of share as per the scheme of amalgamation sanctioned by Reserve Bank

However, if the Shareholders of the Amalgamated Bank are having any liability towards Amalgamated Bank/ Amalgamating Bank, such shareholders shall not be entitled to get any refund of share capital till full and final settlement of his/her dues

Refund of shares shall be given within 3 (three) months from the effective date. The refund shall be made only after surrender of original share certificate of Amalgamated Bank.

                           With effect from the Effective Date, and in consideration of the transfer and vesting of the Undertaking of the Amalgamated Bank in the Amalgamating Bank pursuant to this scheme, without any further application, act or deed, issue and allot to the equity shareholders of the Amalgamated Bank whose names are recorded in the register of members as a member of the Amalgamated Bank on the Effective Date (or to such of their respective heirs, executors, administrators or other legal representatives or other successors in title as may be recognized by the Board of the Amalgamating Bank) shares of Amalgamating Bank as may be arrived as per final Swap Ratio on Appointed Day 1

The Amalgamating Bank Shares to be issued by the Amalgamating Bank to the shareholders of Amalgamated Bank in accordance with this Clause shall be hereinafter referred to as “New Equity Shares”

                           For the purposes of allotment of the New Equity Shares, pursuant to this Scheme, in case any Amalgamated Bank’s shareholder becomes entitled to any fractional shares, entitlements or credit on the issue and allotment of the New Equity Shares by the Amalgamating Bank in accordance with Clause (10.10) above, the Amalgamating Bank shall not issue fractional shares to such shareholder and shall pay the amount at the rate of valuation of shares arrived on Appointed Day 1 to such shareholder to the extent of fractional shares by way of credit to his saving account after effective date

                           As per the bye-laws of Amalgamating Bank, minimum shareholding is Rs. 2500 (50 shares of Rs 50 each). If any shareholder of Amalgamated Bank does not fulfil the minimum shareholding as per bye laws of Amalgamating Bank, he shall make good the shortfall by way of additional subscription to the shares of Amalgamating Bank within maximum period of 2 (years) from the Effective Date. If he is unable to make good the shortfall, he shall be entitled for refund of his shares to the extent of face value of shares held by him.

                           The New Equity Shares of the Amalgamating Bank to be allotted and issued to the shareholders of the Amalgamated Bank as provided in Clause (10.10) above shall rank paripassu in all respects with the Amalgamating

Bank Shares after the Effective Date including in respect of dividend, if any, that may be declared by the Amalgamating Bank on or after the Effective Date

                           Where New Equity Shares of the Amalgamating Bank are to be allotted to heirs, executors or administrators, as the case may be, to successors of deceased equity shareholders or legal representatives of the equity shareholders of the Amalgamated Bank, the concerned heirs, executors, administrators, successors or legal representatives shall be obliged to produce evidence of title satisfactory to the Board of the Amalgamating Bank

                           The new equity shares shall be allotted in physical form to the shareholders of Amalgamated Bank after surrender of original equity share certificates by the shareholders of Amalgamated Bank to the Amalgamating Bank along with share allocation form duly filled in after Effective Date.

                           In case any shareholder is not having original share certificate of Amalgamated Bank, he shall duly apply to Amalgamating Bank stating any other evidence/ document in support of his claim and in such case Amalgamating Bank shall verify the application of such shareholder and take appropriate decision.

                           The Shareholders of Amalgamated Bank shall fulfil KYC norms before getting shares of Amalgamating Bank or getting any refund towards such shares as the case may be

                           In the event of any reasonable doubt about correctness of shares held, the Amalgamating Bank shall withheld the refund of shares/ allotment of shares to the shareholders of Amalgamated Bank until Amalgamating Bank is able to ascertain the correctness of shares held in Amalgamated Bank

11.   EMPLOYEES :-

                           With effect from the Effective Date, all the permanent staff and permanent employees, if any, of the Amalgamated Bank, who are in such employment as on the Effective Date, shall become and be deemed to have become, the staff and employees of the Amalgamating Bank, without any break in or interruption of service. Provided that, the designation shall be decided by the Amalgamating Bank

                           Services of the permanent staff and employees shall be taken into account from the date of their respective appointment with the Amalgamated Bank, for the purposes of all retirement benefits and all other entitlements for which they may be eligible.

                           The Amalgamating Bank shall appoint the present permanent employees of Amalgamated Bank on same pay scale as on the Appointed Day 1, provided that, they are not retired on superannuation/ resigned as on effective date.

                           The trainee employees of Amalgamated Bank shall be treated as permanent after 2 years from his date of appointment as trainee employee. His salary in the amalgamated bank shall be continued till 2 years from the effective date. His salary and designation shall be reviewed after 2 years from the effective date by Amalgamating Bank

                           The permanent employees of Amalgamated Bank shall be paid the salary and allowances at the same pay scales existing as on Appointed Day 1 for the period of 2 (Two) years from the effective date.

                           After two (2) years from effective date, the Amalgamating Bank shall make applicable its own pay scales and service rules to such employees of Amalgamated Bank who continued their service after merger. Provided that, the designations such staff shall be decided by the Amalgamating Bank

                           The service of permanent employees of Amalgamated Bank shall treated as continued service in Amalgamating Bank

                           The employees of Amalgamated Bank which are on daily wages, contract basis etc may be appointed by Amalgamating Bank as contractual employees based on their age, qualification, experience and performance as may be decided by Amalgamating Bank

                           Amalgamated Bank shall not appoint any new permanent or contractual or trainee employee after date of signing this scheme without written consent of Amalgamating Bank. Any such recruitment of any employee shall not be binding on Amalgamating Bank

                           Amalgamated Bank shall not revise pay scales of permanent/ contractual/trainee employees from date of this scheme without written consent of Amalgamating Bank. Any such revision in pay scale shall not be binding on Amalgamating Bank

                           Any employee desirous of leaving the services of the Amalgamating Bank on or before the effective date or any time thereafter shall be at liberty to do so. An employee desirous of quitting/leaving the services in such circumstances within the period of two (2) years from effective date shall be paid the dues as per the pay scales and service rules of the Amalgamated Bank

                           The employees of Amalgamated Bank, who are involved in fraud, embezzlement or found negligent in their duties, or against whom a criminal or civil suits have been filed and they are proved guilty in such cases, or who are continuously absent from duty without any valid

reasons, shall not be absorbed in the services of the Amalgamating Bank. It is the duty of the Amalgamated Bank to initiate and/or proceed with the disciplinary action and try to expedite the matter.

                           The employees of the Amalgamated Bank shall be liable to be transferred among the Branches/ Offices of the Amalgamating Bank in the entire area of operation of the Amalgamating Bank from the effective date and are bound by the service conditions / Rules of the Amalgamating Bank.

                           It is expressly agreed by both the parties that, all eligible encashable leaves of employees of Amalgamated bank shall be paid by the Amalgamated Bank just before the effective date (i.e on or before Appointed Day 1) and no leave of any employee of Amalgamated Bank shall be carried after effective date in the books of Amalgamating Bank

                           The employees of Amalgamated Bank shall be entitled to leaves and their encashment as per the rules prescribed by Amalgamating Bank for their employees. However the encashment of such leaves shall be made as per pay scale of Amalgamated Bank till 2 (Two) years from the effective date.

                           With regard to provident fund, gratuity, created by the Amalgamated Bank, if any, which exist immediately prior to the Effective Date, the Amalgamating Bank shall stand substituted for the Amalgamated Bank for all purposes whatsoever, upon the coming into effect of this Scheme, including with regard to the obligation to make contributions to relevant authorities, such as the Regional Provident Fund Commissioner or to such other funds maintained by the Amalgamated Bank, in accordance with Applicable Law. It is hereby clarified that upon the coming into effect of this Scheme, such benefits and schemes shall continue to be provided to the transferred employees and the service of all transferred employees of the Amalgamated Bank for such purpose shall be treated as having been continuous

12.   LEGAL PROCEEDINGS

With effect from the Effective Date, all legal, taxation or other proceedings whether civil or criminal including but not limited to suits, summary suits, indigent petitions, assessments, appeals, or other proceedings of whatever nature (hereinafter called the “Proceedings”), if any, by or against the Amalgamated Bank, pending as on the Effective Date, shall not abate or be discontinued or be in any way prejudicially affected in any way by reason of the Scheme or by anything contained in the Scheme, but the Proceedings shall be continued, prosecuted and enforced, as the case may be, by or against the Amalgamating Bank, in the same manner and to the same extent as they would or might have been continued, prosecuted or enforced by or against the respective Amalgamated Bank, if the Scheme had not been made. On and from the Effective Date, the Amalgamating Bank may initiate, defend, compromise or otherwise deal with any Proceedings for and on behalf of the Amalgamated Bank. The Amalgamating Bank undertakes to have all the

Proceedings specified in this Clause, initiated by or against the Amalgamated Bank, transfer to its name and to have such Proceedings continued, prosecuted and enforced, as the case may be, by or against the Amalgamating Bank, subject to Applicable Law

13.   OTS/ COMPROMISE SETTLEMENT :

                      Amalgamating Bank has right to enter into a compromise arrangement with the debtor/ borrower or any other person of Amalgamated Bank or write off any such debt or asset in accordance with law/ guidelines issued by RBI and policy framed by the Amalgamating Bank thereunder.

                      Amalgamating Bank has right sell or otherwise dispose off any securities transferred to it or any Asset taken over by it, in accordance with applicable Acts and Rules including sale of Asset to Asset Reconstruction Company

14.   LEGAL / RECOVERY ACTIONS :

                  The Amalgamating Bank shall initiate/continue action against the accused/perpetrator of the fraud of the Amalgamated Bank. Further, in the event of any recoveries by the Amalgamated Bank through the process of investigation or legal action, the Amalgamating Bank shall retain all such amounts.

                  The Amalgamated Bank shall provide full particulars including status, all files relating to such cases, insurance details etc. to the Amalgamating Bank whenever sought.

                  Amounts recovered against any cases of fraud, if any, in the hands of the Amalgamated Bank shall, on merger, be transferred to the Amalgamating Bank

                  Insurance covers / claims in respect of frauds shall be renewed by the Amalgamated Bank from time to time till the date of merger and the claims received from the Insurance Company shall be receipts of the Amalgamating Bank.

                  Amalgamated Bank shall make full efforts for recovery of all NPAs till said date of merger. The Amalgamated Bank shall execute all decrees and awards till the date of merger under the direction of the Amalgamating Bank. Further the Special Recovery Officer/s of the Amalgamated Bank shall make an serious effort of recovery under report to the Amalgamating Bank.

                  Similarly, custody of Assets, Documents, Lockers Vaults in other banks and also the movable/ immovable assets acquired, possessed against the dues of the Amalgamated Bank is to be handed over to the Amalgamating Bank.

                  The Amalgamating Bank will assist Amalgamated Bank to initiate appropriate legal action as may be deemed fit for making recoveries of advances classified as NPAs.

                  The Amalgamated Bank shall initiate all possible legal actions against all the defaulters before the effective date, if such actions are not yet initiated.

                  The Amalgamated Bank shall provide status of the cases filed against the Amalgamated Bank. Pending approval of the proposal of merger, the Amalgamated Bank shall rigorously pursue the legal proceedings against these cases.

15.   ACCOUNTING TREATMENT IN THE BOOKS OF THE AMALGAMATING BANK

                  Notwithstanding anything to the contrary herein, the Amalgamating Bank shall account for the amalgamation of the Amalgamated Bank with the Amalgamating Bank, on completion of all substantial conditions for the transfer, in accordance with “Pooling of Interests Method” laid down in Accounting Standard-14 (Accounting for Amalgamation) issued by Institute of Chartered Accountants of India., as may be amended from time to time

                  The Amalgamating Bank shall record/incorporate the assets and liabilities of the Amalgamated Bank vested in it pursuant to this Scheme, at the respective book values and in the same form as appearing in the books of the Amalgamated Bank as on Appointed Day 1 and such incorporation shall not result in a revaluation upwards or credit taken for unrealized gains

                  The balances in reserves (whether capital or revenue or statutory or arising on revaluation) as appearing in the books of Amalgamated Bank as at the close of Appointed Day 1shall be recorded in the books of Amalgamating Bank as required by applicable accounting standards.

                  Amalgamating Bank shall issue its shares to the shareholders of Amalgamated Bank in accordance with clause

                  Pursuant to the amalgamation of the Amalgamated Bank with the Amalgamating Bank, the inter-bank balances between the Amalgamating Bank and Amalgamated Bank, if any, appearing in the books of the Amalgamated Bank and the Amalgamating Bank, if any shall stand cancelled.

                  The surplus/deficit, if any arising after taking the effect of clause (15.1 to 15.4) above shall be transferred to the “Capital Reserve” in the financial statements of the Amalgamating Bank and shall be presented separately from other capital reserves with disclosure of its nature and purpose in the notes.

                  In case of any difference in the accounting policy between Amalgamated Bank and the Amalgamating Bank, the accounting policies followed by the Amalgamating Bank will prevail to ensure that the financial statements reflect the financial position based on consistent accounting policies.

                  Any matter not dealt with in the Clause hereinabove shall be dealt with in accordance with the accounting standards applicable to the Amalgamating Bank

16.   TAXATION MATTERS

                      With effect from the Effective Date, all Taxes paid, payable, received or receivable by or on behalf of the Amalgamated Bank, including but not limited to all or any refunds, claims or entitlements or credits (including credits for income Tax, withholding Tax, advance Tax, self-assessment Tax, CENVAT credit, goods and services Tax credits, other indirect Tax credits and other tax receivables) shall, for all purposes, be treated as the Tax, liability, refund, claims, including but not limited to claims under section 43B, section 40 of the Income Tax Act, or credit, as the case may be, of the Amalgamating Bank, and any Tax incentives, benefits (including claims for unabsorbed Tax losses and unabsorbed Tax depreciation), advantages, privileges, exemptions, credits, which would have been available to the Amalgamated Bank, shall be available to the Amalgamating Bank, and following the Effective Date, the Amalgamating Bank shall be entitled to initiate, raise, add or modify any claims in relation to such taxes on behalf of the Amalgamated Bank .

                      All compliances with respect to Taxes or any other Applicable Laws undertaken by the Amalgamated Bank, prior to the Effective Date but pertaining to the period after the Effective Date, shall be deemed to have been complied with, by the Amalgamating Bank.

17.   OTHER MATTERS :

                      From the date on which the Boards of the Amalgamating Bank and the Amalgamated Bank approve this Scheme until the Effective Date, the Amalgamating Bank and the Amalgamated Bank shall carry on their respective business with reasonable diligence and business prudence in the ordinary course consistent with past practice, in accordance with Applicable Law and as mutually agreed between the Amalgamating Bank and the Amalgamated Bank.

                      Amalgamated Bank shall comply with KYC norms, risk categorisation norms and UCIC of customers (As per RBI guidelines) till effective date. If the Amalgamated Bank fails to comply with these norms, Amalgamating Bank shall ensure the adherence within six (6) months from the effective date

                      Though Amalgamating Bank is not responsible for any violations committed by Amalgamated Bank prior to effective date, Amalgamating Bank shall take appropriate corrective action on such violations after the effective date

                      Amalgamating Bank reserves its right to initiate appropriate legal action against such staff/ ex staff of the Amalgamated Bank who has found guilty or will found guilty of misconduct or party to fraud or had made gross violations of RBI guidelines / Banking regulation Act 1949(AACS),

                      No depositor or other creditor of the Amalgamated Bank shall be entitled to make any demand against the Amalgamated Bank or the Amalgamating Bank in respect of any liability of the Amalgamated Bank to him except to the extent prescribed by this Scheme

                      The Parties shall be entitled to declare and pay dividends, to their shareholders, as per their respective Board decision (except for the period for which dividend declaration and payout was restricted by RBI) in respect of the accounting period after the date of approval of the Scheme by the Board of the Parties and prior to the Effective Date

                      The Amalgamating Bank and Amalgamated Bank shall be at liberty to do all such acts deeds and things as may be necessary for ensuring complete and effective amalgamation

                      Locker Facility of Amalgamated Bank: The customers of the Amalgamated Bank having lockers in the safe deposit vault shall be intimated by the Amalgamating Bank of this Scheme. However those locker holders who wish to continue with their respective locker agreements made with the Amalgamated Bank can continue such agreements till contractual date with Amalgamated Bank. Those who want to release their lockers shall be allowed by the Amalgamating Bank to do so within 90 days from the date of notice/intimation. Remaining locker holders who neither release their lockers nor intimate in writing to the Amalgamating Bank within 90 days from the date of notice/intimation, shall be liable to pay the locker rent as per the rent structure of the Amalgamating Bank prevailing from time to time.

                      On merger, all the licenses of Branch/Administrative office of the Amalgamated Bank and all other sanctions and permissions obtained if any for the purpose of conducting banking business shall stand transferred to the Amalgamating Bank and be treated as licenses of the Amalgamating Bank. Amalgamating Bank shall apply to RBI for amendment in branch licenses after Effective Date

                      The Amalgamating Bank shall be at liberty to continue banking business at the existing locations of the Amalgamated Bank or relocate to any other location as desired by the Amalgamating Bank within its jurisdiction with the permission of RBI.

                      The Amalgamating Bank shall be at liberty to replace the existing software of the Amalgamated Bank with the software of the Amalgamating Bank. The Amalgamated Bank shall provide full support to the Amalgamating Bank to migrate the Amalgamated Bank’s data to the Amalgamating Bank’s software.

                      All contracts, deeds, bonds, agreements, power of attorney, grant of legal representation, insurance policies, permissions, licenses, authorisations, good-wills etc. and other rights and instruments of whatsoever nature subsisting or having effect shall be effective in favour of the Amalgamating Bank and can be acted upon as if and instead of the Amalgamated Bank, the Amalgamating Bank had been a party thereto or as if they had been issued in favour of the Amalgamating Bank

                      The Amalgamated Bank shall not, before the effective date, settle any loan account or increase its liabilities which is prejudicial to the interests of the Amalgamating Bank. In case, if Amalgamated Bank desires to settle any loan account, it shall consult with Amalgamating Bank before such settlement of loan account

                      The Amalgamated Bank shall not, without the concurrence of the Amalgamating Bank, undertake any wage revision nor incur any liabilities prejudicial to the interest of the Amalgamating Bank after the date of this scheme

                      The Amalgamating Bank reserves its right to continue / discontinue / re- appoint the present Legal Advisors, Valuators, Auditors etc. of the Amalgamated Bank

                      The Amalgamated Bank shall furnish to the Acquiring Bank certain statements such as list of shareholders, employees, Depositors, borrowers, NPA accounts, defualters and also list of pending suits by and/or against the Amalgamated Bank with details as on the Appointed Day 1 duly signed by the Chief Executive Officer of the Amalgamated Bank. The Amalgamating Bank may call for any other statements as may be required from time to time and the Amalgamated Bank shall provide the statement without any delay.

                      Any notice or other communication required to be given by the Amalgamating Bank shall be considered to be duly given, if addressed and sent by registered AD/ordinary post/ hand delivery/Email to the registered address/Registered Email ID of the Amalgamated Bank and such notice shall be deemed to be served on the expiry of 48 (forty eight) hours after it has been posted. Any notice or communication which is of general interest shall be advertised in addition, in one or more daily news papers which may be in circulation at the places where the Amalgamated Bank was transacting its business or by displaying it on the Notice Board of the Branches of the Amalgamated Bank and Amalgamating Bank.

                      If any doubt arises in interpreting any of the provisions of this scheme, the matter shall be referred to the Competent Authority / Registrar of Co- op Societies and his decision shall be conclusive and binding on both the Amalgamating Bank and Amalgamated Banks and also on all the members, nominal members, borrowers, guarantors, depositors and other creditors and employees of each of these Banks and or any other person having any rights or liability in relation to any of these Banks

                    On and from the Effective Date, the registration of Amalgamated Bank shall stand cancelled and the Amalgamated Bank shall be deemed to have been dissolved and shall cease to exist as corporate body

18.   MODIFICATIONS/ AMENDMENTS TO THE SCHEME

                      The Parties by their respective Boards, acting jointly but not individually, at any time, may make and/ or consent to any modifications/ amendments to the Scheme, or to any conditions or limitations that the Competent Authority may deem fit to direct or impose or which may otherwise be considered necessary, desirable or appropriate by the Competent Authority, whether in pursuance of a change in Applicable Law or otherwise. The Parties by their respective Boards, shall be authorized to take all such steps as may be necessary, desirable or proper to resolve any doubts, difficulties or questions whether by reason of any directive or orders of any other authorities or otherwise howsoever arising out of or under or by virtue of the Scheme and/ or any matter concerned or connected therewith.

                      For the purpose of giving effect to this Scheme or to any modifications or amendments thereof or additions thereto, the delegate(s) of the Parties, acting jointly, may give and are hereby authorized to determine and give all such directions as are necessary including directions for settling or removing any question of doubt or difficulties that may arise and such determination or directions, as the case may be, shall be binding on all the Parties, in the same manner as if the same were specifically incorporated in this Scheme.

                      If any difficulty arises in giving effect to the provisions of this scheme, the Competent Authority / Registrar of Co-op Societies may issue to the Amalgamated Bank and the Amalgamating Banks or to either of them such directions as may appear to the Competent Authority/ Registrar of Co-op Societies to be necessary for the purpose of removing the difficulty.

19.   COSTS AND EXPENSES

All costs, charges, Taxes including duties, levies and all other expenses, if any (save as expressly otherwise agreed), incurred by any of Parties in carrying out and implementing this Scheme and matters incidentals thereto, shall be respectively borne by such Parties, till the Effective Date.

All costs, charges, Taxes including duties, levies and all other expenses, if any (save as expressly otherwise agreed), incurred by any of Parties in carrying out and implementing this Scheme and matters incidentals thereto, after the Effective Date, shall be borne by the Amalgamating Bank

20.   APPROVAL

Unless otherwise decided by the Parties, the effectiveness of this Scheme is and shall be conditional upon and subject to the fulfilment of the following conditions precedent:

a)      At first, the Scheme being approved by majority of the respective shareholders of the Amalgamating Bank and the Amalgamated Bank , representing two- thirds of the shareholders both in number and value, present in person at a meeting called for the purpose, as required under the Reserve Bank of India (Amalgamation of Urban Co-operative Banks) Directions, 2020 ;

b)      Finally, the requisite consent, approval or permission of Reserve Bank, in relation to the Scheme having been obtained by the relevant Parties;

c)       Further provided that, the conditions laid down by the RBI in their sanction / approval shall be the part of this Scheme and shall be totally applicable and binding on both the Amalgamated Bank and Amalgamating Bank.

21.   EFFECT OF NON-RECEIPT OF APPROVALS/SANCTIONS

                      In the event of any of the said approvals referred to in Clause 20 above not being obtained or this Scheme not being sanctioned by the RBI and/ or order or orders not being passed as aforesaid before the expiry of 24 (Twenty Four) months from the dates of approval of the Scheme by the respective Boards of each of the Parties, any Party may terminate this Scheme and upon such termination this Scheme shall stand revoked, cancelled and be of no effect. Provided that, in case of non-satisfaction of any other conditions precedent, the Parties shall proceed in such manner as may be mutually agreed between them.

                      If any provision of this Scheme hereof is invalid, ruled illegal by the Reserve Bank, or unenforceable under present or future Applicable Laws, then such provision (so far as it is invalid or unenforceable) shall be severable from the remainder of the Scheme. Further, if the deletion of such part of this Scheme may cause this Scheme to become materially adverse to either any of the Parties, then in such case the Parties shall attempt to bring about a modification in the Scheme, as will best preserve for the Amalgamating Bank, the benefits and obligations of the Scheme, including but not limited to such provision.

22.   RESIDUAL

Any matter in connection with this Scheme, which is not covered under this Scheme but necessary to give effect to the implementation of Scheme shall, subject to the approval of competent authority if any, be decided by mutual understanding between the Board of the respective Parties. For this purpose the

Boards may execute such necessary documents including MOUs as may be necessary.

Therefore, this draft  scheme  of  Amalgamation  is  signed  and  executed  on  this

                _                                              _day of                                             ,2023 at_           

ANNEXURE A

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