Takeover process by CanBank in progress, says Amanath Bank

Takeover process by CanBank in progress, says Amanath Bank

The Amanath Co-Operative Bank has stated that the process of taking over the bank by Canara Bank is in progress and the date for the takeover of assets and liabilities will be announced soon.

In a press release on Monday, Naseer Ahmed, MLC and president of Amanath Co-Op Bank, said that in response to the Amanath Bank board’s request, Canara Bank has agreed in principle to take over the co-op bank in a letter dated September 27.
The same has been communicated to the Reserve Bank of India and Registrar of Co-operative Societies (RCS), Ahmed stated.

The co-op bank has sought permission from RCS for conducting a special general body meeting and is complying with all necessary statutory formalities required by Canara Bank, Naseer Ahmed stated.

It is understood that only the assets and liabilities of Amanath Bank will be taken over by Canara Bank and the bank will not be wound up legally.

The RBI had, in May this year, directed Amanath not to allow withdrawal of more than Rs 1,000 every six months. The agitated depositors had protested in front of the bank premises in Bangalore. RBI then directed the bank to cease all operations till further orders.

The bank’s non-performing assets are worth about Rs 84 crore currently. Among various alleged frauds committed by some of the bank officials and those on its board, one relates to borrowing Rs 56 crore in loans by creating benami accounts.
The co-op bank has about Rs 390 crore in deposits from 2.4 lakh account holders. Loans are currently to the tune of Rs 236 crore. Registered losses were Rs 110 crore to Rs 114 crore last year.

Congress leader Jaffer Sharief, along with several of his supporters, had staged a dharna for a couple of days in the capital recently, demanding a CBI probe into the bank’s transactions.

The 36-year-old bank was meant for minorities’ welfare and hence it should be protected, he had argued. He had indirectly confronted Union Minister K Rahaman Khan, one of the founders of the bank, over the irregularities in the transactions.
When contacted by this paper, Rahaman Khan said the only option left for the co-op bank is to go in for a merger.

“The merger is a good development from the depositors’ point of view. When the bank was started, it had just Rs three lakh in capital. It grew to such an extent that it became a scheduled bank. I left the board 12 years ago. Some people are tarnishing my image over political rivalry. The culprits have been prosecuted. The CID probed the irregularities. What else can be done?” he asked.

N  S Channappa Gowda, registrar of co-operative societies, said that he is yet to get any communication from the co-op bank and the RBI.

“The bank was given an opportunity to set right the anomalies. But nothing was done. The RBI’s permission for takeover is mandatory,” he added.

Sources said that even if the merger takes place, the inquiry into any irregularities will continue.