Corruption Allegations Heat Up Mahesh Bank Polls
The Reserve Bank of India’s inspection report flagged serious governance lapses by the incumbent board led by chairman Ramesh Kumar Bung in executing the project. These findings have become a central theme of the campaign, with rival the ‘Founder panel’ citing them as evidence of mismanagement under the current 'Sansthapak panel’.
Hyderabad: Irregularities in the construction of the head office building have emerged as a major issue in the upcoming board elections of Andhra Pradesh Mahesh Cooperative Urban Bank Ltd, scheduled for December 7.
The Reserve Bank of India’s inspection report flagged serious governance lapses by the incumbent board led by chairman Ramesh Kumar Bung in executing the project. These findings have become a central theme of the campaign, with rival the ‘Founder panel’ citing them as evidence of mismanagement under the current 'Sansthapak panel’.
According to the RBI inspection report, the bank’s board engaged in questionable practices during the construction of its head office, to which it shifted in July 2019.
It noted that the cost of the project, initially estimated at Rs 32.28 crore excluding taxes, was revised to Rs 35.76 crore in 2016 and ultimately completed at approximately ₹44.76 crore in 2020. The steep escalation, coupled with repeated discrepancies pointed out in earlier inspections, reflected lapses in decision-making and transparency.
The inspection report highlighted that several work orders were issued to distant relatives of board directors, bypassing L1 bidders, resulting in legal disputes. One such case involved litigation concerning the flooring contract of the head office building.
The inspection revealed long-standing concentration of power within the bank’s top leadership. The chairman has served as a director since 1994, while the senior vice-chairman has been on the board since 1997.
Since the early 2000s, the two have alternated between key positions, effectively retaining control for decades. Despite having a 15-member board, the bank reportedly failed to review the tenure of its directors in line with Section 10A(2) of the Banking Regulation Act, 1949 (AACS), amended in September 2020, which restricts continuous service of any director to a maximum of eight years.
The revelations have heated up the contest, with the opposing panel using the report to question the credibility and governance standards of the incumbent board led by Ramesh Kumar Bung.