Telangana High Court issues notice to RBI Governor in Mahesh Bank case

The Telangana High Court on Monday issued a contempt notice to Reserve Bank of India (RBI) Governor Shaktikanta Das in the Mahesh Bank loan fraud case.

In this case, top functionaries were allegedly involved in illegal disbursement of loans and other irregularities.

As the RBI failed to appoint an officer to run the administration and day-to-day affairs of AP Mahesh Coop. Bank, as ordered by the Telangana High Court on April 24, the bank's Shareholders Welfare Association had filed a contempt case.

Justice C.V. Bhaskar Reddy asked the RBI Governor to state by July 7, why contempt proceedings should not be initiated.

In its earlier order, the court had directed the RBI to appoint an officer, of its choice, to run the administration and day-to-day affairs of Mahesh Cooperative Bank, who would also have power to take policy decisions in the interest of shareholders.

Directing that senior bank officials be consulted for policy decisions, the court said the move is to protect the interests of shareholders and to run daily operations.

The court issued the orders while dealing with interim applications filed by shareholders, seeking directions to returning officer of Mahesh Bank to exclude from consideration votes cast by 1,800 gold loanees.

They also sought the issuance of a circular to recount the votes and declare the results of board elections afresh.

The writ petitions sought that the court declare circular number 105, issued by AP Mahesh Bank on September 10, 2018, as arbitrary, invalid and ultra vires the provisions of Section 11 of the Cooperative Societies Act, 2002 and Clause 4 of the bye-laws of Mahesh Bank.

Previously, the court granted interim orders on January 8, 2021, directing the newly-elected members or directors not to take any policy decisions about day-to-day administration.

--IANS

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