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Home Stories Shareholders oust Dhanlaxmi Bank CEO Sunil Gurbaxani

Shareholders oust Dhanlaxmi Bank CEO Sunil Gurbaxani

Shareholders of Dhanlaxmi Bank on Wednesday ousted Managing Director and Chief Executive Officer Sunil Gurbaxani, little over seven months after he assumed charge of the lender.

The development comes a day after the Reserve Bank of India appointed its General Manager D K Kashyap on the board of the bank for two years.

The proposal to approve the appointment of Sunil Gurbaxani as Managing Director & CEO of the bank was opposed by over 90 per cent of shareholders at the Annual General Meeting (AGM), the Kerala-based bank said in a regulatory filing.

As per the Scrutinizer’s Report of the 93rd AGM, 90.49 per cent shareholders voted against Gurbaxani’s appointment while only 9.51 per cent voted in favour.

Gurbaxani assumed office as CEO in February this year. A veteran banker, he has 35 years of experience with the State Bank of India Group and Axis Bank.

Meanwhile, the shareholders approved appointment of four independent directors — P K Vijayakumar, G Rajagopalan Nair, Suseela Menon R and G Subramonia Iyer. Re-appointment of Gopinathan C K as a director on the bank’s board was also approved.

On Tuesday, RBI appointed D K Kashyap, General Manager at the central bank’s Bengaluru Regional Office as an Additional Director on Dhanlaxmi Bank’s board till September 27, 2022.

The RBI usually does not appoint its nominee on the boards of private banks unless there are exceptional circumstances to avoid any conflict of interest.

Dhanlaxmi Bank was put under the Prompt Corrective Action (PCA) framework by RBI in November 2015 due to deteriorating financial health. The lender came out of the framework, wherein various restrictions were imposed, only last year and since then it has been making profits.

Bank unions — AIBOC and AIBEA — had flagged concerns over few developments at Dhanlaxmi Bank and also sought immediate corrective measures by RBI.

In a letter written to RBI Governor Shaktikanta Das, All India Bank Officers’ Confederation (AIBOC) had requested the central bank to take appropriate steps in this regard, so that this 93-years-old institution is allowed to grow in its own space catering to its own niche segments.

In a separate letter, All India Bank Employees’ Association (AIBEA) had urged the governor to intervene into the affairs of the bank which it alleged was heading in the wrong direction.

Another South-based private lender Lakshmi Vilas Bank (LVB), which was put under the PCA framework in September 2019, has also come under RBI’s watch.

On Sunday, the central bank approved appointment of a three-member Committee of Directors (CoD) to run the daily affairs of LVB. The move came after the bank’s shareholders ousted seven directors. The CoD will exercise the discretionary powers of MD & CEO in the ad-interim.

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