The board of Abhyudaya Co-operative Bank will seek expert views on the legality of the Reserve Bank of India’s (RBI) action, superseding the bank’s board of directors, chairman Sandeep Ghandat told FE. “We will take experts’ view to ascertain the legality of this action. We are posting operating profits,” he said.
Ghandat said the lender already has an RBI-appointed additional director, Rajendra Kumar, on its board for the last two years. RBI officials, Ghandat said, conducted monthly reviews of the performance and said the next meeting was scheduled to be held in Mumbai suburbs on November 29.
The cooperative bank has been able to trim its bad loans from Rs 1,550 crore to below Rs 1,200 crore in the last two years. It sold bad loans of Rs 1,000 crore to asset reconstruction companies and also received Rs 200 crore in the last 4-5 years, he said.
“They are accusing us of doing nothing, but we were working together. The senior management are all founders, they built the bank and played a key part in its growth. We enhanced our recovery efforts as we wanted to post good results in Q3 and Q4,” he said.
Ghandat said, “…the bank suffered a lot because of Covid-19 and demonetisation.”
In order to lower costs, the lender has reduced its staff strength, shut three branches and pushed owners to lower rent in the existing outlets. “There were at least 10 parameters where we could cut costs and there were 10 other parameters where we could make more profits,” he said.
Ghandat claimed recent rumors of the RBI cancelling the licence of Abhyudaya Co-operative bank were spread by “opposition parties” and reiterated that no one, including the RBI-appointed director, had any update on it.
“The bank is not problematic, they (regulator) think we are growing slowly. We do take possessions of defaulter properties, we issued ten tenders for sale of properties (NPAs), but there is no buyer as many banks were selling their NPAs. There are less buyers and more sellers,”Ghandat said, adding that had the bank liquidated its Mumbai suburb property, it alone would have fetched at least Rs 200 crore.