Two significant developments unfolded on Monday concerning Abhyudaya Cooperative Bank.
First, RBI secured a victory in the Bombay High Court as the plea of the former Chairman Sandeep Ghandat and other petitioners challenging RBI’s decision to supersede the board of Abhyudaya Cooperative Bank, was rejected.
Secondly, the RBI extended the term of the Administrator team overseeing the bank’s affairs by another year.
Coming to the court case, the writ petition, filed by Sandeep Ghandat and others against the Reserve Bank of India (RBI) and others, challenged the RBI’s decision to supersede the board of Abhyudaya Cooperative Bank. The case was heard in the High Court of Judicature at Bombay today (Monday).
In its judgment, the court stated, “In these circumstances, in our view, the impugned order dated 24 November 2023 cannot be assailed on the ground that no notice or hearing was given before passing the said order.
“In light of the aforesaid discussion, and for the aforesaid reasons, we are not inclined to interfere with the impugned order dated 24 November 2023 in our writ jurisdiction under Article 226 of the Constitution of India. In these circumstances, the petition is hereby rejected, and the rule is discharged. In the facts and circumstances of the case, there shall be no order as to costs”, it added.
Talking to the Indian Cooperative, a crest fallen Sandeep Ghandat said he is yet to figure out his future course of action post the judgement.
On the issues of extension, the press release of RBI reads, “The Reserve Bank of India (RBI), in exercise of its powers under sub-Section (1) of Section 36AAA read with Section 56 of the Banking Regulation Act, 1949 (as applicable to Co-operative Societies), has extended the period of supersession for a further period of 12 months, effective from November 24, 2024.”
The release concluded by stating, “Consequently, Shri Satya Prakash Pathak will continue as the Administrator of the bank, assisted by the Committee of Advisors comprising Shri Venkatesh Hegde, Shri Devendra Kumar, and Shri Suhas Gokhale.”
It bears recalling that the Reserve Bank of India (RBI), in exercise of its powers under Section 36AAA read with Section 56 of the Banking Regulation Act, 1949 (as applicable to Co-operative Societies), had superseded the Board of Directors of Abhyudaya Cooperative Bank Ltd., Mumbai, for 12 months on November 24, 2023, due to material concerns arising from poor governance standards observed within the bank.