Bangalore: The Karnataka High Court on Thursday directed Canara Bank to take over Amanath Co-operative Bank.

The court passed this order while hearing a petition seeking amalgamation of Amanath Co-operative Bank with Canara Bank. Justice Ram Mohan Reddy said the requisite notification should be issued within four weeks as per an RBI scheme.

The court also directed the Registrar of Co-operative Societies to prescribe the date as soon as possible for Canara Bank to finish the formalities of taking over the assets and liabilities of Amanath Bank.

Justice Reddy observed, “Amanath Bank has around 2.20 lakh customers. Among them, 90,000 are depositors. The bank registered growth till 2002. Due to misappropriation of funds and fraud by its staff, it incurred heavy losses of Rs 66.41 crore between 1998 and 2000.”

It is only after this financial setback, did Amanath Bank’s management decided to amalgamate it with a nationalised bank, the court observed and asked the two banks to work out a way through which the hard earned money of the depositors is protected.

The court also asked Canara Bank to make the accounts of depositors and borrowers of Amanath Bank operational after the notification of the latter bank’s takeover. The court gave the depositors and fixed deposit account holders an option to either close the account or continue the account with Canara Bank.