The state-based scheduled urban co-operative lender Amanath Bank intends to merge itself with public sector lender Canara Bank.
The Board of Directors of the Amanath Bank decided to merge it with the Canara Bank. They also called on the State-owned bank's top brass and requested them to accept their request.
The move is expected to provide respite to more than 2.5 lakh customers of the Amanath Bank who are affected due to the restrictions imposed by the Reserve Bank of India (RBI).
The top bank had issued a directive to the Amanath Bank on April 1 following alleged irregularities by the earlier board members.
It was directed to regulate all transactions to Rs1,000 per account for a period of six months.
The decision led to massive outrage and panic among its customers who mostly hail from economically backward sections with an average holding/savings of around `50,000-2 lakh.
Union Minister for Minority Affairs, K Rahman Khan, one of the founders and also a past president of the bank, is alleged to have siphoned off over Rs 110 crore on the pretext of loans given to his close relatives.
However, he has denied all allegations.
The bank said that it received no help from earlier members of the board and community, putting more pressure on affected customers.
This has forced the bank to take a decision to merge with it any good nationalised bank, its authorities claimed.
Confirming the development, Chairman of the bank Naseer Ahmed said, "We met the CMD of Canara Bank and placed our request. Now they will appoint agents to assess the assets and liabilities of the bank and then present the report in their next board meeting."
He, however, did not give a timeline for the proposed merger.