Deposits safe, RBI confident of fixing Abhyudaya Co-op Bank's governance

Lender was under regulatory watch for about 2 yrs, had ignored RBI red flags

Abhyudaya Cooperative Bank is probably the first lender whose board was superseded by the Reserve Bank of India (RBI) without imposing business restrictions.
 

This reflects the regulator’s comfort that some governance concerns of the lender could be addressed without disturbing the operations of this multi-state cooperative bank, sources said. The lender, established in 1965, was under regulatory watch for about two years, sources said.
 

The asset quality of the bank worsened with gross non-performing assets (NPAs) increasing substantially with a depleting capital position.
 

In May 2022, the RBI imposed a Rs 58 lakh penalty on it for violating several norms.