The Hindu Business Line : Moratorium on Ganesh Bank extended

The Government has extended the period of moratorium on Ganesh Bank of Kurundwad till October 6, according to a press release from the Reserve Bank of India.

"The moratorium has been declared in public interest, in the interest of the depositors and the banking system," the release said.

Earlier, the government had issued a three-month moratorium on the bank on January 7, as the bank's net worth has turned negative. However, before the end of the three-month period, RBI approved a proposal by the Kerala-based Federal Bank to take over Ganesh Bank. The government had ordered the amalgamation of the two banks on January 25.

This was, however, contested by a group of persons, including the Ganesh Bank Chairman, a shareholder, a depositor and an employee who filed a petition in the Bombay High Court. In an interim order, the High Court stayed the government order but restored the order of moratorium on Ganesh Bank.

The case then moved to the Supreme Court, which declined to stay interim order passed by the Bombay High Court.

In April, the Mumbai High Court dismissed the petition challenging the merger, but ordered that the moratorium would continue for a period of four weeks. The time period was to allow the petitioners to appeal further.

Following this, petitioners of Ganesh Bank went to the Supreme Court. As the judgement is awaited, the government decided to issue a fresh moratorium on Ganesh Bank.

More Stories on : Private Banks | Financial Policy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Course in Actuarial Management

Forex reserves increase by $952 m

Rupee gains marginally

Max New York Life targets Rs 1,000-cr new biz premium

Govt reluctant to clear AICIL expansion move

Crisil puts TN units on rating watch

Bond prices fall; sentiment negative

South Indian Bank board okays hike in FII limit

Moratorium on Ganesh Bank extended

7 States to sell loans

Union Bank Q1 loan growth at 34 per cent

Indian Bank chief speaks in defence of bankers

Bank credit increases by Rs 12,601 cr

Call rates remain flat

Andhra Bank to focus on low-cost deposits

RBI staff plan dharna