A group of like-minded leaders of Arya Ediga Community formed the bank in 1976 with a meagre share capital of Rs. 2 Lakhs. The bank was registered under the provision of Karnataka Co-operative Societies Act, 1959 on 31st May 1976. Reserve Bank of India issued the license under the provision of Banking Regulation Act, 1949 on 17th November 1978 to conduct banking business.