Amanath Bank's takeover by Canara Bank cheers depositors
The formal announcement by Amanath Cooperative Bank (ACB) that public sector lender Canara Bank has agreed to take over (ACB) has come as a much-awaited relief to employees and depositors of ACB.
The state convenor of an non-governmental organisation Association for Protection of Civil Rights (ACPR), Irshad Ahmed Desai said, “We have a deposit of Rs 2.95 lakh with Amanath Bank and were unable to withdraw for the past few months. We hope our problems end soon.”
Similarly, As-Sidique Trust secretary Syed Tanveer Ahmed heaved a sigh of relief on Canara Bank's take over of ACB. “We have about Rs 3 lakh deposit and were not able to withdraw for the past six months. Now, we hope some good results will emerge.” The Trust has been a customer of ACB for the past five years.
The president of ACB, Naseer Ahmed said that after Canara Bank's September 27, 2013 communication to ACB to take over, the next steps would be to approach the Registrar of Cooperative Societies and Reserve Bank of India conveying them of Canara Bank's decision. “This will be followed by the annual general meeting of ACB shareholders to formally approve the decision,” he said.
When contacted, the deputy general manager and chief compliance officer of Canara Bank, S Ramesh declined to comment. Sources said that the due diligence to decide on the take over was done by auditors Varma & Varma, Bangalore.
A ACB employee for close to 20 years, requesting anonymity, said that since April - when the Reserve Bank of India imposed cap on withdrawals by ACB depositors from each account to Rs 1,000 in a six-month period – the bank has made hardship payments to depositors for Rs 30 crore.
He added the bank has 2.40 lakh depositors who hold about Rs 390 crore, while its advances amount to Rs 250 crore, including NPAs and questionable advances of Rs 103 crore. “Liquidity is no issue, but worry is that deposit erosion has gone up from 18 per cent earlier to about 20 per cent now,” he said.