New Delhi, Dec. 6 (PTI): The takeover of Centurion Bank by Andhra Bank has assumed a new dimension with Andhra Bank asking the RBI for full compensation in view of erosion of Centurion’s net-worth or to impose a moratorium.
“As Centurion Bank has eroded its networth, eating into the depositors’ money, a full compensation from the Deposit Credit Guarantee and Insurance Corporation, is being sought,” the sources said.
Centurion Bank, with net non-performing assets of 6.66 per cent of net advances in 2001-02, had capital adequacy ratio of 4.16 per cent, much lower than the RBI-mandated 9.0 per cent. Moreover, its deposit base had shrunk by 17 per cent in 2001-02 with decline in term deposits.
In the first six months of this fiscal, Centurion Bank reported a net loss of Rs 17.06 crore as compared with the Rs 161.84 crore in the same period in 2000-01.
Andhra bank has strongly pitched for compensation so that the takeover does not affect its balance sheet.