Lakshmi Vilas Bank episode repeats; Dhanlaxmi shareholders too reject MD’s appointment

THRISSUR/September 30: As if taking cue from the Lakshmi Vilas Bank episode a few days ago, the shareholders of Dhanlaxmi Bank on Wednesday voted against the appointment of the managing director and chief executive Sunil Gurbaxani, the bank said in a stock exchange filing.

The capital-starved Lakshmi Vilas Bank’s shareholders had a few days ago at its general meeting voted against the appointment of seven directors, including that of S. Sundar as the bank’s managing director and chief executive officer.

Both banks strike another similarity of being under the RBI’s prompt corrective action (PCA) for some time for their poor financial credentials though have come out of the PCA a few months ago.

Having said that, the financial and other problems faced by Lakshmi Vilas Bank are much more serious and the bank has been in talks with several financial institutions for capital infusion and the latest in the works is with Clix Group, which is in advanced stage of signing a deal with LVB, according to the bank sources

It was on Tuesday, the shareholders of another Thrissur-based private sector bank, South Indian Bank (SIB) approved the appointment of Murali Ramakrishnan as the bank’s new managing director and chief executive officer (CEO) in the place of VG Mathew who served the bank as its MD & CEO for two terms of three years each.

AIBOC hails Dhanlaxmi shareholders’ move

All India Bank Officers’ Confederation (AIBOC) welcomed the verdict by the shareholders of Dhanlaxmi Bank to reject the appointment of Gurbaxani as the bank’s new MD & CEO.

A statement from AIBOC said the verdict against the Managing Director also portrays that the shareholders prefer the Old Generation Private Sector Bank to grow by catering to its niche segments by adopting a business model that is sustainable and inclusive.

AIBOC has also urged the Reserve Bank of India (RBI) to act upon the shareholders’ verdict and assist the bank in growing in its own space.

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