HC nod for Canara Bank, Amanath Bank merger

HC nod for Canara Bank, Amanath Bank merger

The High Court on has allowed Canara Bank to take over assets and liabilities of Amanath Co-operative Bank and directed the Registrar of Cooperative Societies to issue a gazette notification in this regard.

Hearing a batch of petitions seeking amalgamation of Amanath Co-operative Bank with Canara Bank , Justice Ram Mohan Reddy observed: “The Registrar, Co-operative Societies, is directed to issue a gazette notification pertaining to the takeover within two weeks as per Karnataka Registrar of Societies Act, 1959.” Within 30 days after the notification, the Canara Bank should begin the process of acquisition and take over the assets and accounts of Amanath Co-operative Bank.

During the hearing, the Amanath Co-operative Bank, Reserve Bank of India and Canara Bank submitted about the scheme. Accordingly, the Court observed: “Canara bank is directed to notify terms and schemes formulated by the RBI. Whoever operated from Amanath Bank and its branches will be operating under the aegis of Canara Bank now. Notification be issued for publications in newspapers as well as television for the benefit of depositors.”

When the Canara bank sought directions to the State government to waive of the stamp duty pertaining to the  transfer of properties, liabilities and the specified assets, the Court  directed the State government to consider the request.

Suggesting that Canara Bank should not to be harsh on over two lakh innocent customers for the fault of 19,000 borrowers or defaulters, the Court directed that Amanath Co-operative Bank should ensure recovery of  the default amount.

The court directed the depositors to surrender old cheque books issued by Amanath Bank and collect the new ones from the Canara bank. For those who have safe deposit lockers in Amanath Bank were given an option either to continue the agreement with Canara bank or discontinue it. Stating that as per 35 (A) of the Banking Regulation Act, the Reserve Bank of India  should protect Amanath Bank depositors and the court appreciated the efforts of Canara Bank acting in favour of the depositors.