Dhanlaxmi Bank CEO Sunil Gurbaxani resigns

By: |
October 2, 2020 1:15 AM

Gopinathan, who is a shareholder of the bank along with NRIs B Ravindran Pillai and MA Yusuf Ali, told FE that Gurbaxani was trying to change the nature of the bank and harm the interests of the shareholders.

The interim arrangement will not continue beyond four months within which the bank will complete the process of identification and appointment of a new MD & CEO.The interim arrangement will not continue beyond four months within which the bank will complete the process of identification and appointment of a new MD & CEO.

Sunil Gurbaxani, who was voted out from the post of managing director and CEO of Dhanlaxmi Bank by shareholders, tendered his resignation to the board on Thursday. The lender said in a regulatory filing on Thursday that the Reserve Bank of India has approved an interim arrangement for formation of a committee of directors to exercise the powers of managing director & CEO till such time a new person takes charge.

The interim arrangement will not continue beyond four months within which the bank will complete the process of identification and appointment of a new MD & CEO.

Gurbaxani told FE that the problems at the Thrissur-based lender are chronic and no one has been accountable for a long time. “I have explained the problems of the bank to the appropriate authorities. So far, no one has stood up to the problems. Many departures in the past were due to manipulations by certain persons with a handful of shareholders,” he said and added that less than 30% of the shareholders voted in the proceedings.

The board of Dhanlaxmi Bank has recommended a three member committee of directors consisting of G Subramonia Iyer (chairman), G Rajagopalan Nair and P K Vijayakumar to manage the daily operations of the bank.

Shareholders of Dhanlaxmi Bank were concerned over the approach and methods of Gurbaxani, CK Gopinathan, director of the bank who was reappointed at the AGM, said on Thursday.

Gopinathan, who is a shareholder of the bank along with NRIs B Ravindran Pillai and MA Yusuf Ali, told FE that Gurbaxani was trying to change the nature of the bank and harm the interests of the shareholders.

“The bank had gone through a bad phase during 2008-2013 and was under the Prompt Corrective Action (PCA) framework of the RBI for some time. We are now a profitable bank and well capitalised. Naturally, shareholders and workers of the bank are careful and scrutinise the actions of the bank officials,” he said.

The bank stands well capitalised with a comfortable capital adequacy ratio of 14.41% after significant reduction in non-performing assets, he said.

The RBI had taken the bank off the PCA framework in February 2019 after improvement in the lender’s performance. During FY20, the bank reported a net profit of Rs 65 crore, the highest ever in its nine-decade existence.

Shareholders of the bank also approved the resolution for increasing the authorised share capital of the bank from Rs 300 crore to Rs 400 crore and consequent alteration to the Memorandum & Articles of Association of the bank.

Shares of the bank closed marginally higher at Rs 12.40 on the BSE on Thursday.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Bajaj Auto net profit dips 19% to Rs 1,138 crore in Q2
2RBI move to provide easier access to home loans: Hardayal Prasad, MD & CEO, PNB Housing Finance
3HDFC AMC’s profit down 8% YoY to Rs 338 crore in Q2