Dhanlaxmi Bank Shareholders Reject Sunil Gurbaxani As MD And CEO
This is the second such ouster of a bank chief in less than a week.
A day after the Reserve Bank of India appointed an additional director on Dhanlaxmi Bank’s board, the lender’s shareholders have voted against appointment of Sunil Gurbaxani as managing director and chief executive officer. This is the second such ouster of a bank chief in less than a week.
The shareholders voted on 10 resolutions, including ratifying Gurbaxani’s appointment, at an annual general meeting held on Wednesday. More than 90% of the shareholders, who voted on the resolution, did so against the appointment, according to an exchange filing. The new CEO for the Thrissur-based bank was appointed in February for a three-year term, after he received the regulator’s nod.
Apart from Gurbaxani, appointments of other directors such as Gopinath CK, G Subramonia Iyer, Captain Suseela Menon R, G Rajagopalan Nair and PK Vijayakumar were all approved by the shareholders.
The bank’s board of directors and the Reserve Bank of India had approved Gurbaxani’s appointment in February, for a period of three years. He took charge as MD and CEO with effect February 27. But the appointment was pending ratification by shareholders.
Gurbaxani had previously served at lenders such as State Bank of Bikaner & Jaipur and Axis Bank. He succeeded T Latha, who had resigned as MD and CEO of Dhanlaxmi Bank in October of last year citing personal reasons.
On Sept. 25, shareholders of another old generation private lender Lakshmi Vilas Bank had voted against the appointment of S Sundar as its MD and CEO.
Last week, the All India Bank Officers’ Confederation had requested intervention by the RBI in daily affairs at Dhanlaxmi Bank. In a letter addressed to RBI Governor Shaktikanta Das, the officers union had asked for the banking regulator to take appropriate steps, else it would be held responsible for the deteriorating financial conditions at the bank.
The union warned the regulator against Dhanlaxmi Bank’s decision to once again expand its branch presence in the northern parts of the country, where it had previously failed. On Tuesday, the RBI appointed DK Kashyap on the board of Dhanlaxmi Bank for a period of two years.
Dhanlaxmi Bank had exited the prompt corrective action framework of the regulator only in February 2019. Under the framework, a bank is restricted from expanding its business or its presence.
The private bank reported a net profit of Rs 6 crore in the April-June quarter, as compared with a profit of Rs 2 crore in March. Gross advances fell to Rs 6,520 crore as on June 30, compared with Rs 6,738 crore a year ago. Gross non-performing assets ratio rose to 7.61%, from 5.9% quarter-on-quarter. Dhanlaxmi Bank’s capital adequacy ratio stood at 13.85% as on June 30, as compared with 14.41% on March 31.