Dhanlaxmi Bank said Thursday that the Reserve Bank of India approved a three-member panel until the new managing director and chief executive officer take over. The board of directors will be made up of Shri. G. Subramonia Iyer as president, G. Rajagopalan Nair and PK Vijayakumar as members. The banking regulator has ordered that the interim agreement will not continue beyond four months, the bank said in the regulatory document. The bank was asked to complete the procedures for the appointment of a new CEO and CEO.
Shareholders of regional lender Dhanlaxmi Bank removed its chief executive officer at its annual general meeting on Wednesday, the bank said in a regulatory document. More than 90% of the shareholders who voted opposed the appointment of Sunil Gurbaxani, which had been approved by the Reserve Bank of India in February as CEO of Dhanlaxmi for a three-year term. The bank’s regulatory filing gave no reason for the CEO’s sudden removal.
Dhanlaxmi Bank, a 92-year-old private sector lender with 247 branches, has been playing a stellar role in economic development, especially in the southern part of the country. The bank said on Thursday that its shareholders approved to raise the bank’s authorized share capital to ₹400 crore of ₹300 crore before. The increase in the cap is a consequence of the alteration of the bank’s Memorandum and Articles of Association, subject to approval by the Reserve Bank of India, he said.
On Tuesday, RBI appointed DK Kashyap as an additional director on the board of Dhanlaxmi Bank until September 27, 2022. Currently, Kashyap is the general manager of the central bank’s Bengaluru regional office. The RBI generally does not appoint its candidate to the boards of private banks unless there are exceptional circumstances to avoid any conflict of interest.
The Kerala-based lender was put under the Rapid Corrective Action Framework (PCA) by the RBI in November 2015 due to deteriorating financial health and only last year came out of these restrictions. Since then it has made a profit.
Previously, the banking unions All India Bank Officer ‘Confederation (AIBOC) and All India Bank Employees Association (AIBEA) have raised concerns about the few developments at Dhanlaxmi Bank and have sought immediate remedial action from the RBI. In a letter written to RBI Governor Shaktikanta Das, AIBOC said that it is a well-known fact in the banking industry that misplaced priorities and lax supervision wreaked havoc at Dhanlaxmi Bank a decade ago.
The Bank Employees Association of India (AIBEA) in a letter to the RBI governor stated that the bank is looking to change its business profile, expand its network in North India and hire high-level contract people with a high compensation that could get you in trouble. according to report.
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