Homefinance News

    Dhanlaxmi Bank shareholders reject appointment of CEO Sunil Gurbaxani

    finance | IST

    Dhanlaxmi Bank shareholders reject appointment of CEO Sunil Gurbaxani

    Mini

    Shareholders of Thrissur-based Dhanlaxmi Bank on Wednesday rejected the appointment of Sunil Gurbaxani as managing director and chief executive officer of the bank

    Shareholders of Thrissur-based Dhanlaxmi Bank on Wednesday rejected the appointment of Sunil Gurbaxani as managing director and chief executive officer of the bank.
    Over 90 percent of votes were polled against the appointment of Dhanlaxmi Bank CEO at the Annual General Meeting (AGM) on September 30.
    In February, RBI had approved the appointment of Sunil Gurbaxani as managing director and CEO of the bank for a period of three years. He took charge from February 27, 2020.
    In a recent letter written to RBI, the All India Bank Employees' Association (AIBEA) had urged the RBI governor to intervene into the affairs of Dhanlaxmi Bank which it alleged is heading into the wrong direction.
    The letter alleged that the bank is planning to appoint a large number of sales executives and senior executives on contractual and cost to company basis at much higher remuneration, "This will land the bank in a catastrophe and financial burden which, we apprehend, the bank cannot bear and afford at this juncture."
    "If Reserve Bank of India does not effectively intervene in the affairs of this Bank now, once again the bank will run into problems. Slowly, the people and the customers of the bank have regained their confidence about the Bank and any reversal of the same would be suicidal for the Bank. We strongly believe that RBI’s role in the Board of Directors of the Bank should be reviewed as otherwise, RBI would become answerable if things go bad," the letter said.
    Yesterday, Dhanlaxmi Bank said the RBI has appointed its general manager D K Kashyap on the board of the bank for two years. However, the bank did not disclose the reason for the appointment of the RBI's nominee of its board.
    In a regulatory filing, Dhanlaxmi Bank said the banking sector regulator through a letter dated September 28, 2020, has appointed D K Kashyap, General Manager, Reserve Bank of India, Bengaluru Regional Office as Additional Director on the board of the bank.
    The appointment is for a period of two years with effect from September 28, 2020, to September 27, 2022, or till further orders, whichever is earlier, it said.
    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. Dhanlaxmi Bank 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 a profit.
    In a letter written to RBI governor Shaktikanta Das, All India Bank Officers' Confederation (AIBOC) requested the central bank to take appropriate steps in this regard, so that this 92-years-old institution is allowed to grow in its own space catering to its own niche segments.
    Another private lender Lakshmi Vilas Bank (LVB), which was put under the PCA framework in September 2019, has also come under the RBI's watch. The RBI on Sunday approved the appointment of a three-member Committee of Directors (CoD) to run the daily affairs of Lakshmi Vilas Bank after bank shareholders ousted seven directors of the debt-ridden lender. This CoD will exercise the discretionary powers of MD & CEO in the ad-interim.
    next story

      Market Movers

      View All
      CompanyPriceChng%Chng