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RBI Approved a 3 member Interim Committee of Directors, headed by G Subramonia Iyer to Run Dhanlaxmi Bank 

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RBI approves appointment of CoD to run Dhanlaxmi Bank till appointment of CEOOn October 1, 2020 The Reserve Bank of India(RBI) approved a 3 member interim Committee of Directors (CoD) to exercise the powers of Managing Director(MD) & Chief Executive Officer(CEO) of Dhanlaxmi Bank Ltd till a new MD & CEO takes charge. G. Subramonia Iyer will head(Chairman) the CoD, G. Rajagopalan Nair and P.K Vijayakumar will serve as its members.

Points to be Noted

i.RBI has directed that the interim arrangement should not continue beyond four months, within which the bank must complete the proceedings of appointing a new MD and CEO.

ii.RBI appointed D K Kashyap, General Manager of RBI’s Bengaluru Regional Office as an  Additional Director on Dhanlaxmi Bank’s board till September 27, 2022. RBI now has 2 members on Dhanlaxmi Bank’s Board, including G. Jagan Mohan.

iii.Generally, RBI does not appoint its nominee on the boards of private banks, only if there are exceptional circumstances to avoid any conflict of interest.

Key Info

i.Shareholders of the bank rejected the resolution for appointment of Sunil Gurbaxani as  MD and CEO at the 93rd Annual General Meeting of the bank held on September 30, 2020. About 90% of the vote was casted, against his appointment.

ii.His appointment was approved by RBI in February, 2020 for a term of 3 years. 

iii.The regulatory filing of the bank did not cite any reason for the sudden ousting of him.

Note

Sunil Gurbaxani has 35 years of experience with the State Bank of India(SBI) Group and Axis Bank.

Additional Info

  • In November 2015 Dhanlaxmi Bank was put under the Prompt Corrective Action (PCA) framework by RBI, due to the bank’s deteriorating financial health.
  • RBI removed the bank from the framework in 2019. After this it became profitable.

Recent Related News:

On September 27, 2020 The Reserve Bank of India(RBI) approved that the daily affairs of Lakshmi Vilas Bank (LVB)will be run by a Committee of Directors (CoD) composed of 3 independent directors namely, Meeta Makhan, Chairperson of the CoD, Shakti Sinha, Member and Satish Kumar Kalra, Member. The CoD will exercise the discretionary powers of Managing Director(MD) and Chief Executive Officer(CEO) in the ad-interim.

About Dhanlaxmi Bank Ltd:

Headquarters– Thrissur, Kerala