The Reserve Bank of India has superseded the board of directors of Abhyudaya Co-operative Bank Ltd. for 12 months.
The central bank has appointed Satya Prakash Pathak, former official of the State Bank of India, as administrator to take care of affairs during the period of supersession. A committee of advisors has been put in place to assist Pathak, it said in a release on Friday.
The three-member committee includes former SBI official Venkatesh Hegde, former Cosmos Co-operative Bank Managing Director Suhas Gokhale and Chartered Accountant Mahendra Chhajed.
The RBI took the decision due to "material concerns over poor governance standards observed in the bank".
"No business restrictions have been placed by RBI and the bank shall continue to carry on its normal banking activities as is hitherto, under the guidance of the administrator," the RBI said.
On Oct. 25, a press release with the RBI letterhead was circulated stating that Abhyudaya Co-operative Bank's licence to continue banking operations had been cancelled. However, the document was found to be fake.
As on March 31, 2020, the bank's total deposits stood at Rs 10,838 crore, with more than 17.3 lakh depositors. Its advances stood at Rs 6,654 crore. The bank's capital adequacy ratio, as of March 31, was at 12.6%. Financial results after FY20 are not available in the public domain.
This comes after the RBI had superseded the board of PMC Bank in September 2019, on account of financial fraud and misreporting of loans disbursed to the real estate company, HDIL. This resulted in amalgamation of PMC Bank with Unity Small Finance Bank Ltd.
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