The Reserve Bank of India (RBI) has superseded for 12 months the board of directors of Irinjalakuda Town Co-operative Bank due to concerns over the lender’s poor financial health and governance standards.

The RBI has appointed Raju S Nair, former Vice President at Federal Bank, as ‘Administrator’ to manage the bank’s affairs during this period.

A ‘Committee of Advisors’ has also been appointed to assist the administrator in discharging his duties.

The members of the committee are Mohanan K, former Deputy General Manager of South Indian Bank, and TA Mohamed Sageer, former Vice President of Federal Bank.

On 30 July, the RBI had imposed several business restrictions on Irinjalakuda Town Co-operative Bank. It was barred from granting or renewing any loan, making any investment and accepting fresh deposits, among others, without any prior approval of the RBI in writing. 

Restriction was also placed on the withdrawal of funds by the bank's customers.

In a separate statement, the RBI said certain restrictions, including a cap on withdrawal, have been imposed on Sadbhav Nagrik Sahakari Bank Maryadit, Chhatarpur.

"Considering the bank's current liquidity position, the bank has been directed to permit withdrawal of a sum not exceeding Rs 5,000 of the total balance held in savings bank or current accounts or any other account of a depositor, but is allowed to set off loans against deposits...," it said.

The RBI has also imposed restrictions on Samarth Urban Co-operative Bank Ltd., Osmanabad.

Samarth Urban Co-operative Bank has been directed not to allow withdrawal of any amount from savings bank or current accounts, the RBI said in another release.

Similar conditions have been imposed on Samarth Sahakari Bank, Solapur, Maharashtra.