Reserve Bank of India (RBI) has constituted a three-member panel who will take charge of Dhanlaxmi Bank. Retired Executive Director of UCO Bank, G. Subramania Iyer will be heading the operations. Retired General Manager of Federal Bank Rajagopalan Nair and P.K. Vijayakumar, retired Director General of Income Tax and former Insurance Ombudsman as well as one of India’s highly decorated tax officers will be the other members of the panel.
The Committee of Directors will be in charge of Dhanlaxmi Bank until a full-time Managing Director and CEO is appointed for the bank.
Sunil Gurbaxani, who was heading Dhanlaxmi Bank as Managing Director & CEO quit following the official declaration of the voting held at the Annual General Meeting (AGM) and the RBI order announcing appointment of the new Committee of Directors reaching Dhanlaxmi Bank’s head office.
RBI has stated that the interim arrangement is for a period of four months within which the bank has to formalize the appointment of a new Managing Director & CEO.
Dhanlaxmi Bank had a lean phase for around five years from 2008 and 2013 and was placed under the Prompt Corrective Action (PCA) framework of RBI. However, the bank came out through its lean phase and is now a profitable enterprise with enough capital at its disposal and significant reduction in non-performing assets. RBI deboarded the bank from the PCA framework after seeing its improvements. During FY 20 the bank reported a net profit of Rs.65 crore, the highest ever in its 90 years’ history.
At the AGM, the bank’s shareholders approved the resolution for increasing the authorised share capital of the bank from Rs.300 crores to Rs.400 crores and amend the Memorandum & Articles of the Association of the bank to this effect.
Shareholders opined that Dhanlaxmi Bank is in safe hands under the leadership of the Committee of Directors constituted by RBI comprising G. Subramania Iyer, Rajagopalan Nair and P.K. Vijayakumar. They added that the bank will benefit immensely from the experiences of such high calibre senior officials and they are keenly looking forward to work with this team.
Public sector banks in India enjoy a higher market capitalization but their financial health continues to be a worrying factor. There are many private and foreign banks operating in India that are an integral part of the country's banking system and known for providing hassle-free banking services to customers. Following the issues of PMC Bank and Yes Bank, there are various concerns among the public. It is to be noted that recently, the government has brought all co-operative banks within RBI's ambit which bodes well for the common public.
