Petitioners Had Challenged RBI Decision to Supersede Elected BoD of Abhyudaya Bank
On Monday November 19, 2024, two major developments took place regarding Abhyudaya Cooperative Bank.
First, the Reserve Bank of India (RBI) emerged victorious in the Bombay High Court as the court rejected the plea filed by former Chairman Sandeep Ghandat and other petitioners, challenging RBI’s decision to supersede the bank’s board.
Second, the RBI announced the extension of the Administrator’s term overseeing the bank’s operations for an additional year.
In the court case, the writ petition filed by Sandeep Ghandat and others against the RBI and others contested the central bank’s decision to take control of Abhyudaya Cooperative Bank’s board. The matter was heard on Monday at the Bombay High Court.
In its ruling, the court stated, “In these circumstances, we believe the impugned order dated November 24, 2023, cannot be challenged on the grounds of lack of notice or hearing before its issuance.”
The court added, “In light of the aforementioned, we are not inclined to interfere with the impugned order dated November 24, 2023, under our writ jurisdiction under Article 226 of the Constitution of India. The petition is thus dismissed, and the rule is discharged. No costs are to be awarded in this case.”
Speaking with Indian Cooperative, a disheartened Sandeep Ghandat mentioned that he has yet to decide on his future course of action following the judgment.
Regarding the extension, the RBI’s press release stated: “In exercise of its powers under sub-Section (1) of Section 36AAA in conjunction with Section 56 of the Banking Regulation Act, 1949 (as applicable to Co-operative Societies), the RBI has extended the supersession period for an additional 12 months, effective from November 24, 2024.”
The release concluded by confirming that Shri Satya Prakash Pathak will continue as the Administrator, supported by the Advisory Committee comprising Shri Venkatesh Hegde, Shri Devendra Kumar, and Shri Suhas Gokhale.
It’s important to note that the RBI had initially superseded the Board of Directors of Abhyudaya Cooperative Bank Ltd., Mumbai, on November 24, 2023, citing significant concerns over poor governance within the bank.
