NEW DELHI: The Reserve Bank of India (RBI) has suspended the board of Mumbai-based Abhyudaya Cooperative Bank and taken over the reins of the bank after the banking regulator detected ‘certain material concerns emanating from poor governance standards observed in the bank’.
The board of the bank will remain suspended for 12 months. RBI has appointed Satya Prakash Pathak, former chief general manager of State Bank of India (SBI) as “administrator” to manage the affairs of the bank during this period. It has also appointed a Committee of Advisors to assist the Administrator to discharge his duties.
The Committee of Advisors comprise Venkatesh Hegde former General Manager of SBI, Mahendra Chhajed, Chartered Accountant, and Suhas Gokhale, former MD, COSMOS Co-operative Bank Limited.
According to a statement issued by the RBI, the above action is necessitated due to certain material concerns emanating from poor governance standards observed in the bank.
No business restrictions have been placed by RBI and the bank will continue to carry on its normal banking activities under the guidance of the administrator. The Board of Abhyudaya Cooperative Bank consisted of charman Sandeep S Ghandat, who is a member of Indian National Congress. Bank was started by his father Sitaram Ghandat in 1965.
The bank has more than 2.23 lakh members and more than 17.30 lakh depositors. As on March 31, 2021, the bank had `10,952 crore in deposits and `671 crore in advances.