The Reserve Bank of India (RBI) has approved the appointment of Ajith Kumar KK as the managing director and chief executive officer of Dhanlaxmi Bank for a period of three years with effect from the date of his taking charge.
The Board of Directors of the bank will meet soon to approve the appointment of Ajith Kumar and seek the approval of the shareholders thereafter, as per the regulatory provisions, the bank said in a communication to exchanges.
Ajith Kumar KK is a seasoned banker with over 36 years of experience with the Federal Bank Limited in various capacities, including credit, human resources, business, and branch banking. Presently he is the chief human resources officer at Federal Bank Limited in the cadre of the president.
Kumar is also a director of Federal Operations and Services Limited, a wholly owned subsidiary of Federal Bank Limited, on account of his employment.
On January 16, Moneycontrol had exclusively reported that Ajith Kumar's was one of the five names sent to the RBI by the lender for the corner office. He was part of the final list of candidates for the CEO post on two earlier occasions too.
Earlier, the RBI had asked Dhanlaxmi Bank Managing Director and Chief Executive Officer Shivan JK to continue in office till the successor assumes charge, according to a person familiar with the development. Shivan's term was set to end on January 29, 2024.
Dhanlaxmi Bank shareholders had ousted former CEO Sunil Gurbaxani at the bank's Annual General Meeting (AGM) on September 30, 2020. On September 26, 2023, the RBI had cleared the name of KN Madhusoodanan as the part-time chairman of Dhanlaxmi Bank after 21 months of running the operations without a chief since the resignation of G Subramonia Iyer in December 2021 for personal reasons.
Iyer had cited certain urgent and emergent domestic and personal reasons and there were no other material reasons for his resignation, the bank had said in 2021. In September last year, Sridhar Kalyanasundaram, one of the independent directors of the Kerala-based lender, had resigned citing multiple issues in the bank's operations and internal battle within the Board, according to a communication from the bank to exchanges on September 17.
Kalyanasundaram, in his resignation letter, highlighted multiple issues such as lack of support from the board, dispute over a proposed rights issue, capital enhancement plans, conduct of the bank's board, probity and lack of consensus on the various 'whistle-blower' issues raised to the directors and unethical conduct of bank's business.
Q3 earnings
In the October-December quarter, Dhanlaxmi Bank had posted a multi-fold decline in net profit to Rs 3 crore in the third quarter ended December 2023. The private sector bank had earned a net profit of Rs 22 crore in the year-ago period.
The lenders’ total income increased to Rs 343 crore during the third quarter of the ongoing fiscal as against Rs 312 crore a year ago, Dhanlaxmi Bank said in a regulatory filing. The bank's interest income rose to Rs 308 crore compared to Rs 276 crore in the third quarter of the previous year. The bank's Gross Non-Performing Assets (NPAs) declined to 4.81 percent of the gross loans by the end of December 2023 from 5.83 a year ago.
Similarly, net NPAs, or bad loans, came down to 1.27 percent from 1.82 percent at the end of the third quarter. Capital Adequacy Ratio of the bank declined to 12.37 percent over 12.52 at the end of December 2022.
On April 18, Dhanlaxmi Bank's share price ended at Rs43.8 apiece, down 1.66 percent, from the previous close.
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