RBI supersedes board of Mumbai's Abhyudaya Cooperative Bank for 12 months

The Reserve Bank of India on Friday superseded Board of Mumbai-based Abhyudaya Cooperative Bank for 12 months due to "material concerns".

The banking regulator has appointed Satya Prakash Pathak, former Chief General Manager of State Bank of India, as “Administrator” to manage the affairs of the Mumbai-based bank during this period. RBI has also appointed a “Committee of Advisors” to assist the Administrator to discharge 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).

RBI said it had to take the action "due to certain material concerns emanating from poor governance standards".

"The 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 shall continue to carry on its normal banking activities as is hitherto, under the guidance of the Administrator," said RBI in a statement.

In October, RBI had clarified that it did not revoke the lender's licence. 

"The Reserve Bank of India vide its order dated November 24, 2023 has superseded the Board of Directors and appointed an Administrator for a period of 12 months to streamline the governance and secure proper management of the bank. 

"The stakeholders including depositors, shareholders and public are hereby informed that the bank continues to do mormal banking operations as before, and the Head Office along with the branches/ATMs are functional for banking activities, as usual," said the bank in a statement on its website.

According to the bank’s website, it has 109 branches. Of these, 18 branches provide service seven days a week and the bank also has 113 ATMs.

The lender started operations in 1964 and on January 11, 2007 and was registered as a Multi-State Co-operative Bank by the Central Registrar, New Delhi. The bank’s operations are confined to three states--  Maharashtra, Gujarat, and Karnataka.

"As on March 31, 2020, the bank had more than 2.23 lakh members and more than 17.3 lakh depositors. As on  March 2020, the bank’s deposits reached up to Rs 10,838 crore while advances reached upto Rs 6,654 crore. The bank has maintained a ratio of CASA deposits to total deposits as high as 37.55%. The Capital Adequacy Ratio maintained by our bank is as high as 12.6%," as per the bank's website.