The High Court of Karnataka on Friday said former Union Minister C.K. Jaffer Sharief and others are at liberty to deposit Rs. 66 crore with their respective accounts in Amanath Cooperative Bank (ACB) as part of their attempt to revive the loss-making bank and save it from being merged with the Canara Bank.
Justice Ram Mohan Reddy passed the order on an application filed by Mr. Sharief and others seeking the court’s permission to deposit the amount to show their bona fide over their claim of organising funds for reviving the bank and to prevent its merger.
The application was filed during the hearing of petitions related to, for and against the merger of the ACB with the Canara Bank as well as the petition filed by Mr. Sharief and others seeking a probe by the Central Bureau of Investigation into the affairs of the ACB.
Meanwhile, the counsel for the Reserve Bank of India (RBI) told the court that its policy on merger did not permit it to give a go-ahead for Canara Bank to absorb the losses that ACB has already incurred.
The Canara Bank’s board of directors decided against the initial merger proposal when the audit report indicated that ACB’s depositors will have to lose 32 per cent of their deposit amount as against the initial estimate of 18 per cent loss if the merger has to be financially viable as per the RBI’s norm.
Hardship Committee
When it was pointed out that depositors are facing problem as the RBI had imposed restriction on withdrawal of money from accounts, the RBI counsel said that in case of exigencies, accountholders can file a petition before the Hardship Committee of the RBI for releasing some amount and that some depositors had already availed this facility.
While asking all the parties to resolve the issue, the Court adjourned further hearing to February 20.
