Mahesh Bank operations to be run by RBI officer

City-based Andhra Pradesh Mahesh Cooperative Bank is to be run by an officer, of the RBI's choice, who has the power to take policy decisions in the shareholders' interest, day to day operations, according to orders issue by the Telangana High Court on Thursday.

Taking action to protect the interests of shareholders and run daily operations, the High Court directed that senior bank officials could be consulted on policy decisions.

Justice CV Bhaskar Reddy issued the orders while dealing with interim applications filed by shareholders seeking directions to exclude votes cast by 1,800 gold loanees from consideration. A circular was also sought to recount the votes and re-declare the results of board elections.

In its writ petitions, AP Mahesh Bank sought to declare circular no. 105, issued on September 10, 2018, invalid and contrary to Section 11 of the Cooperative Societies Act, 2002 and Clause 4 of its bye-laws.

In January 2021, the court granted interim orders instructing newly-elected members or directors not to make day-to-day administrative decisions.

Counsel for the shareholders, however, claimed that the order halted the entire bank's business, inconveniencing them and account holders. This order has been in force for over two years, so it needs to be vacated or modified.

The court did not express any opinion on the merits of the matter, which will be decided in a full hearing on the validity of the elections and consequential election of members.