The European Central Bank (ECB) has placed troubled Italian lender Banca Carige under temporary administration for capital woes.

The decision was taken after majority of Banca Carige board members resigned from their posts.

Banca Carige temporary administration:

ECB has appointed three temporary administrators and a three-member surveillance committee to take the responsibility of Banca Carige.

In a statement, ECB said: “The resignation of the majority of the board made the installation of temporary administration necessary to steer the bank in order to stabilise its governance and pursue effective solutions for ensuring sustainable stability and compliance.”

The new administrators will now work to restore compliance with the capital requirements and reduce bad debts.

They will also explore possible merger partnerships to ensure stability of Banca Carige.

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The appointment of the new administrators also leads to the removal of the bank’s management and control bodies.

In November last year, the bank received €320m from other Italian banks by issuing convertible bonds to meet the year-end deadline to strengthen capital. It received the new funding through Italy’s depositors guarantee fund (FITD).

The new administrators are expected to negotiate with FITD as the bond was scheduled to be repaid by early this year, reported Reuters.

Banca Carige, the tenth largest bank of Italy, raised €2.2bn in capital since 2014 to improve its financial strength.