BackDhanlaxmi Bank: RBI approves interim panel to run operations till new MD, CEO take charge
RBI has directed that the interim arrangement will not continue beyond four months, the bank said in the regulatory filingShareholders of Dhanlaxmi Bank ousted its chief executive at its annual general meeting on Wednesday
PremiumDhanlaxmi Bank on Thursday said that the Reserve Bank of India has approved a three-member panel till the new managing director and chief executive officer take charge. The committee of directors will be constituted with Shri. G. Subramonia Iyer as chairman, G. Rajagopalan Nair and P.K Vijayakumar as members. The banking regulator has directed that the interim arrangement will not continue beyond four months, the bank said in the regulatory filing. The bank has been asked to complete the proceedings of appointing a new MD and CEO.
Shareholders of regional lender Dhanlaxmi Bank ousted its chief executive officer at its annual general meeting on Wednesday, the bank said in a regulatory filing. More than 90% of shareholders who voted opposed the appointment of Sunil Gurbaxani, who had been approved by the Reserve Bank of India in February as CEO of Dhanlaxmi for a term of three years. The bank's regulatory filing did not give any reasons for the CEO's sudden ousting.
Dhanlaxmi bank, a 92-year-old private sector lender with 247 branches, has been playing a stellar role in the economic development especially in the southern part of the country. The bank on Thursday said its shareholders have approved raising the authorised share capital of the bank to ₹400 crore from ₹300 crore earlier. The increase in the limit is consequent to alteration to the Memorandum & Articles of Association of the bank, subject to the approval of the Reserve Bank of India, it said.
On Tuesday, RBI appointed D K Kashyap as an additional director on Dhanlaxmi Bank's board till September 27, 2022. At present, Kashyap is the general manager at the central bank's Bengaluru regional office. The RBI usually does not appoint its nominee on the boards of private banks unless there are exceptional circumstances to avoid any conflict of interest.
Kerala-based lender was put under the Prompt Corrective Action (PCA) Framework by the RBI in November 2015 due to deteriorating financial health and only last year it came out of these restrictions. Since then it has posted profit.
Earlier, Bank unions All India Bank Officers' Confederation (AIBOC) and All India Bank Employees Association (AIBEA) have flagged concerns over few developments at Dhanlaxmi Bank and sought immediate corrective measures by the RBI. In a letter written to RBI Governor Shaktikanta Das, AIBOC said it is a well-known fact in the banking industry that misplaced priorities and supervisory laxities had wreaked havoc on Dhanlaxmi Bank a decade ago.
The All India Bank Employees' Association (AIBEA) in a letter to the RBI governor claimed the bank is looking to change its business profile, expand network in northern India and hire senior people on contractual basis at high remuneration which could land it into problems, according to report.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
