Abhyudaya Coop Bank's Net NPA is 12%; "A skilled team can tidy up the balance sheet"

 Abhyudaya Coop Bank's Net NPA is 12%; "A skilled team can tidy up the balance sheet"

It was revealed that the co-operative bank's cost-to-income ratio had increased to 80% only one day after the Reserve Bank had dissolved the board of the bank with its headquarters in the city.

"Abhyudaya Coop Bank has a 12% net non-performing asset (NPA); a skilled team can improve the balance sheet."

On November 25, sources reported that Abhyudaya Co-operative Bank's net non-performing asset (NPA) ratio had risen to 12%. The co-operative bank's cost-to-income ratio shot up to 80% a day after the Reserve Bank of India disbanded the board of the bank with its headquarters in the city.

On November 24, the RBI issued an order superseding the board for a year due to serious concerns about the bank's inadequate governance standards. However, the decision did not impose any commercial limitations. To help him, he engaged an administrator and an advisory group.

Informants said that incompetent leadership caused the cost-to-income ratio to gradually drop and accumulate nonperforming assets over time. As per the sources, the bank management, headed by chairman Sandeep Ghandat, made significant hirings to sway voters in the Parbhani area of Maharashtra, which is the family's political stronghold.

Sources said that the bank had achieved operational profits in FY2013 and that a significant portion of deposits were in inexpensive current and savings accounts, allaying any fears among clients. According to those with knowledge, the bank has continuously maintained both the cash reserve ratio and the regulatory liquidity requirement.

According to someone with knowledge, "the professional team will handle the day-to-day operations of the bank, enabling it to recover its bad loans, clean up its balance sheet, and also improve operational efficiency." It will be handled by Abhyudaya Bank. Since there are no limitations in place, go on with business as usual.

According to reports on November 24, the RBI had decided to open its currency chest for the next three days in order to make sure that all of the lender's ATMs could disburse cash in response to depositor requests. The regulatory action against the bank was one of the most significant taken against a cooperative lender since the PMC Bank case, in which depositors were also subject to severe limitations.