By CR Sukumar
The remarkable turnaround of the AP Mahesh Cooperative Urban Bank is being seen as a model case for revival in India’s cooperative banking sector, demonstrating how coordinated regulatory, judicial, and professional intervention can rescue a struggling institution.
Founded in 1978, the bank faced one of the most challenging phases in its history between 2020 and 2023. Governance disputes, regulatory action by the Reserve Bank of India, legal battles, and a major cyber fraud incident severely eroded depositor confidence and operational stability. The situation led to the imposition of the Supervisory Action Framework and a sharp decline in business.
A turning point came with the intervention of the Telangana High Court, which facilitated the appointment of a professional administrator in consultation with the RBI, bringing both independence and accountability to the bank’s management. This move, combined with regulatory oversight, laid the foundation for a structured recovery plan.
A key factor in Mahesh Bank’s revival was the appointment of Sri Ram Narayana Boga, a retired senior SBI executive, in October 2023. Drawing upon over three decades of banking experience, Boga played a crucial role in stabilising the institution by strengthening governance, rebuilding staff confidence, accelerating recovery efforts, and overseeing major technology and cybersecurity reforms. Working closely with the bank’s senior employees, he helped steer Mahesh Bank from crisis towards renewed profitability and operational stability.
Under the new leadership, the bank initiated wide-ranging reforms. Governance structures were strengthened, professional management was inducted, and internal committees were reconstituted. Equal emphasis was placed on employee welfare through promotions, wage revisions, and skill development, helping restore morale across the organization.
Simultaneously, the bank undertook significant technology upgrades to address cybersecurity vulnerabilities, modernize infrastructure, and improve digital banking services. Customer outreach programs and focused business strategies, including growth in gold loans and CASA deposits, contributed to stabilizing operations.
One of the most significant achievements of AP Mahesh Cooperative Urban Bank was the sharp reduction in NPAs through focused recovery efforts. Gross NPAs declined from Rs 75.58 crore in March 2023 to Rs 38.68 crore in March 2025, while net NPAs remained at zero. Strong recoveries, better cost control, and plugging of income leakages helped the bank post a record profit of Rs 53.61 crore in FY2024-25, the highest in its 47-year history.
The turnaround was reflected across key financial indicators. Net owned funds rose to Rs 475.18 crore, book value per share increased to Rs 312.13, and the board declared a 22% dividend for FY2024-25. According to provisional data as on March 31, 2026, deposits stood at Rs 1,958.73 crore, advances crossed Rs 1,030.80 crore, and total business reached Rs 2,989.53 crore, signalling sustained recovery and renewed growth momentum.
The results have been notable. The bank reported record profits for FY2024-25, a sharp reduction in non-performing assets, and improved key financial indicators. In a major endorsement of its recovery, the RBI withdrew the Supervisory Action Framework in June 2025, citing improved governance and financial health.
The successful election of a new Chairman and Board, along with strong financial performance for the year ending March 2026, has further reinforced confidence among stakeholders. The bank is now focusing on expansion, digital growth, and strengthening its position in the cooperative banking landscape.
The Mahesh Bank story highlights the importance of “regulatory wisdom, judicial innovation, and professional execution” in reviving distressed institutions. The bank’s journey from crisis to stability is now being viewed as a practical roadmap for cooperative banks across the country facing governance and operational challenges.
(CR Sukumar is a former Senior Editor of The Economic Times and currently an advocate at the Telangana High Court)
