Kerala: AIBEA asks RBI to allow merger of Adoor Co-operative Urban Bank with Kottayam Bank

In a letter to Shaktikanta Das, Governor, Reserve Bank of India (RBI) India’s largest bank employee’s union All India Bank Employees Association (AIBEA) has urged the RBI to allow merger of the Adoor Co-operative Urban Bank with Kottayam Co-operative Bank.

Saying that both the banks have agreed on merger, AIBS asked RBI to issue notification in this regard as soon as possible.

The RBI, seeing the poor financial condition of Adoor Bank, had put restrictions on merger in November last year.

CH Venkatachalam, the AIBEA general secretary said that the restriction was extended from time to time which will end on March 9.

“General Body Meetings of shareholders of Kottayam Co-operative Urban Bank and Adoor Co-operative Urban Bank were held and in both the meetings the decision to merge and scheme of amalgamation were approved unanimously,” said AIBEA.

“In the month of September 2021, the same was communicated to RBI. No Objection Certificate from the Registrar of Co-operative Societies was also submitted to the Reserve Bank of India,” added AIBEA.

Restriction on Adoor Bank – a 90-year-old urban cooperative bank of Kerala was imposed in 2018 for alarmingly low capital adequacy ratio and high NPA.

The RBI had then said that the customers cannot withdraw more than Rs 2,000, irrespective of the type or volume of their accounts.

As per media reports, the Adoor Bank having nearly 5,000 account holders, had a total deposit of Rs 10 crore then.

Experts say the Adoor Bank was on the RBI’s radar for nearly a decade for its low scores in key financial parameters.