Excess SLR holdings reason for RBI's comfort on Abhyudaya Co-operative Bank

The gross NPA ratio of the bank is around 12 per cent, and the regulator aims to bring it down to 8 per cent through sustained recovery efforts

The board of Abhyudaya Co-operative Bank, which was superseded by the Reserve Bank of India (RBI) without imposing any restrictions, such as a cap on deposit withdrawal, is because the lender maintains a statutory liquidity ratio (SLR) much higher than mandated.

“There was comfort since the bank has excess SLR, meaning any depositors who come to withdraw money should not have any problem. Currency chests were also kept open to meet any requirements. However, it was not required as everything went off smoothly,” said a source familiar with the development.

According to sources, governance was the main issue the bank