RBI supersedes Irinjalakuda Town Co-operative Bank's board

Mumbai, Oct 7 (PTI) The Reserve Bank on Tuesday superseded the Board of Directors of Irinjalakuda Town Co-operative Bank due to the lender's continued poor financial condition and issues related to governance standards.

The board has been superseded for 12 months.

The RBI said it has appointed Raju S Nair, former Vice President, Federal Bank, as 'Administrator' to manage the affairs of the bank during this period.

A 'Committee of Advisors' has also been appointed to assist the administrator in discharging his duties.

The members of the Committee of Advisors are Mohanan K (former Deputy General Manager, South Indian Bank) and TA Mohamed Sageer (former Vice President, Federal Bank).

"The above action is necessitated due to certain material concerns emanating from continued poor financial condition and governance standards observed in the bank," the RBI said in a statement.

Earlier in July, the RBI had imposed several restrictions on Irinjalakuda Town Co-operative Bank.

According to the directions, the bank was barred from granting or renewing any loan, making any investment, and accepting fresh deposits, among others, without prior approval of the RBI in writing.

Restriction was also placed on the withdrawal of funds by the bank's customers.

In another statement, the RBI said certain restrictions, including a cap on withdrawal, have been imposed on Sadbhav Nagrik Sahakari Bank Maryadit, Chhatarpur.

"Considering the bank's current liquidity position, the bank has been directed to permit withdrawal of a sum not exceeding Rs 5,000 of the total balance held in savings bank or current accounts or any other account of a depositor, but is allowed to set off loans against deposits...," it said.

Restrictions have also been imposed on Samarth Urban Co-operative Bank Ltd., Osmanabad.

Samarth Urban Co-operative Bank has been directed not to allow withdrawal of any amount from savings bank or current accounts, the RBI said in a separate release.

Similar conditions have been imposed on Samarth Sahakari Bank, Solapur, Maharashtra. PTI NKD NKD BAL BAL