RBI supersedes Mumbai-based Abhyudaya Cooperative Bank’s board for 12 months - CNBCTV18

In yet another instance of the regulator taking action against a bank due to governance-related concerns, the Reserve Bank of India on Friday said it had superseded the board of Abhyudaya Cooperative Bank for a period of 12 months. It also appointed Satya Prakash Pathak, former Chief General Manager of State Bank of India as the ‘Administrator’ to manage the affairs of the bank during this period.

The regulator said that this action was necessitated due to “certain material concerns emanating from poor governance standards observed in the bank”. However, RBI clarified, that no business restrictions have been placed on the bank, and it would continue to carry on its normal banking activities as is hitherto, under the guidance of the Administrator.

“In exercise of the powers conferred under Section 36 AAA read with section 56 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies), the Reserve Bank has today superseded the Board of Directors of Abhyudaya Cooperative Bank Ltd., for a period of 12 months,” RBI said in a public notification on its website.

The Reserve Bank has also appointed a “Committee of Advisors” to assist the Administrator in discharging his duties. The members of the “Committee of Advisors” are Venkatesh Hegde (former General Manager, SBI), Mahendra Chhajed (Chartered Accountant); and Suhas Gokhale (former MD, COSMOS Co-operative Bank Limited).

In October, there was a fake document doing the rounds on social media in October, claiming RBI had cancelled the licence of Abhyudaya Cooperative Bank. An RBI official had clarified this was not true at the time.

The Mumbai-based cooperative bank has 109 branches, and 113 ATMs, as per its website. As of March 31, 2021, the bank had deposits of ₹10,952 crore versus ₹10,838 crore in the previous fiscal. Its loans and advances were at ₹6,711 crore in FY21, compared to ₹6,654 crore in FY20, as per information available on its website.

The RBI has in the past superseded boards of Yes Bank, Dewan Housing Finance, SREI twins, and Reliance Capital in the past for various reasons.

(Edited by : Pihu Yadav)

First Published: Nov 24, 2023 6:11 PM IST

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RBI supersedes Mumbai-based Abhyudaya Cooperative Bank’s board for 12 months - CNBCTV18
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