Three-member CoD to run day-to-day affairs of Lakshmi Vilas Bank

Bank says depositors are safe

MUMBAI: The story never ends for the capital-starved Lakshmi Vilas Bank Ltd (LVB).

Following the dramatic AGM on September 25, where the shareholders of LVB voted against the appointment the chief executive officer (CEO) and directors at the AGM, the Reserve Bank of India (RBI) on Sunday approved the appointment of a committee of directors (CoD) comprising three independent directors to run the day-to-day affairs of the bank.

A statement from the bank said the CoD will exercise discretionary powers of MD & CEO and is composed of Meeta Makhan, the Chairperson, Shakti Sinha and Satish Kumar Kalra as members.

According to media reports, close to 60 per cent of the shareholders voted against the move to reappoint interim Managing Director (MD) and Chief Executive Officer (CEO) S. Sundar, and seven independent directors at the recent AGM.

The bank has been struggling to find a way to run the troubled bank ever since the RBI rejected the bank’s famously planned move to merge with Indiabulls Housing Finance in October last.

Liquidity position is strong 

The bank said it now has a “fully functional” board, including three independent directors and moreover the liquidity position of the bank is comfortable with a Liquidity Coverage Ratio (LCR) of about 262 per cent as on September 27, 2020, as against minimum 100 per cent required by RBI.

The bank statement added that the deposit holders, bond-holders, account-holders and creditors are well safe guarded.

Bank said it will continue to share information on the developments in public domain as and when they materialise, and as required by applicable law.

LVB’s loss before tax provision was at Rs 112.28 crore, for the quarter ended June 30, 2020.

The rejection of the appointment of top management comes at a time when the bank was desperately looking for capital and was in talks with the Clix Group for merger.

 

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