The Chennai-headquartered mid-sized private sector bank has been headless since mid-September after the then chief executive Parathasarathy Mukherjee left before the completion of his three-year term.
Close to 70 senior bank executives are in the fray to occupy the corner room office of the chief executive and managing director of the Tamil Nadu-based lender Laxmi Vilas Bank. The Chennai-headquartered mid-sized private sector bank has been headless since mid-September after the then chief executive Parathasarathy Mukherjee left before the completion of his three-year term. The bank, which has been placed under the prompt corrective action by the monetary authority since August for low capital buffer and higher NPAs coupled and mounting losses, is scheduled to complete the process by November 10.
“We have received as many as 68 applications for the post of chief executive and managing director, signalling higher interest in the nearly 100-year- old private sector bank,” a bank source privy to the development told PTI. Senior executives from leading private sector lenders like ICICI Bank, Kotak Mahindra Bank, Axis Bank, foreign lender Standard Chartered Bank and public sector bank Canara Bank have applied for the post, the source added. The list also has a few turnaround specialists who have the track-record of making loss-making banks profitable, the source said. The recruitment process, which is currently underway, will get over by November 10 and the new management will take charge by the first week of December if the Reserve Bank approval comes in.
The new chief executive’s focus will be to turn around the bank, which has already initiated a slew of measures for faster recovery, added the source. The bank has already kicked off a fast-paced exercise to improve asset quality by recovering bad loans and to shore up its capital buffer, both have been below the regulatory levels. The ongoing plan is implemented with the involvement of all including the branch heads, added the source. “Simultaneously, cost-control measures are also in place to boost profitability,” the source said. The bank is also in talks with potential investors to raise funds, including some PE funds.
Following the failure of getting RBI nod for the merger with Indiabulls Housing Finance and being placed under the PCA, there were lots of rumours about the bank being shuttered in social media, forcing it last week to file an FIR with the cyber cell of the Chennai police. The accounts against which the bank, which has been placed under operational restrictions, also include one named ‘Priyanka Gandhi – Future of India’. One of the fake messages spoke about the closure of its branches and ATMs, the bank said in the complaint.
For the June quarter, LVB reported higher losses at Rs 237 crore, up from Rs 142 crore a year ago on higher provisioning and lower growth in net interest income as its gross NPAs touched 17.3 per cent from 10.73 per cent, while net NPAs rose to 8.30 per cent from 5.96 per cent. The LVB counter dipped 5 per cent to Rs 15.50 on BSE last Friday as against a flat closing of the benchmark Sensex with a positive bias.