Amanath Bank Fiasco
The shutters will finally come down on Amanath Cooperative Bank in Bangalore. The management has resolved to allow its takeover by the nationalized Canara Bank. The Muslim managed bank which served the community for close to 35 years will go down in the annals of Muslim history as yet another fiasco and a classic case of the loot of people’s money and complete insensitivity towards the plight of depositors who were denied access to their hard-earned money for months together. Unconfirmed reports have mentioned suicides by some depositors following cancellation of marriage of daughters and ruin of businesses. Though not a great financial success, Amanath Bank was emblematic of the optimism it triggered about the community’s capacity to take a toddlers’ step into the world of collective finance. By supporting hundreds of small entrepreneurs, it inspired hopes of more confident forays into bigger ventures in the future. But the unbridled avarice and greed of the people at the helms of affairs seems to have only boosted their confidence to flout the norms with gay abandon. Crony capitalistic streak , which has a firm foundation in the Indian psyche, appeared to have taken possession of their senses. Blood being thicker than water, kith and kin of the directors were rewarded with huge loans against forged, fictitious and completely fake collaterals. Borrowings made by an allied group of educational institutions often surpassed the borrowings from the general depositors. Little did the men at helms realize that their shameful doings were sullying the concept of ‘Amanath’, i.e., honest custody, which they had publicly professed to safekeep. The remorseless management kept on deceiving the hapless depositors and shareholders about the health of the Bank through the newspapers the group owned , even though the rot had seeped down to its roots. Even a reshuffle at the apex did not stem the downslide. The new incumbents were more blatant at digging the grave and expedited the downslide through a variety of means. One among them reportedly waived off the interest component of the loan he owed to the bank. One does not know as to why the Deputy Registrar K. P. Appanna’s report, which had named ten leading Muslim businessmen and a leading politician from Bangalore for being severely responsible for securing loans on the basis of forged documents and defaulting on loans, was not acted upon.
Even as the Bank is winding down its operations and preparing for a merger, it is not clear if the depositors’s money is safe and if the shareholders would be offered equivalent stakes in the new dispensation. Having stage-managed the concluding scene by their own henchmen raising ‘Yes’ placards for the merger, they have not come clean on the trajectory the final episode would follow.
The fiasco of the Amanath Cooperative Bank and the Al-Ameen Islamic Financial Investment Corporation (AIFIC)—which vanished with nearly Rs. 18 crore deposits a decade ago—only confirm the proposition that honesty, integrity and trustworthiness are more basic requirements to run financial institutions than the money they deal in. The people who betray trust are likely to cause misery on a grander scale than poverty afflicting individuals.