The Reserve Bank of India (RBI) has appointed one of its officers on the Board of Thrissur-based Dhanlaxmi Bank for a period of two years from September 28, the bank informed the stock exchanges on Tuesday.
The RBI has appointed D K Kashyap, General Manager, Reserve Bank of India, Bengaluru Regional Office as Additional Director on the Board of the Bank, the lender said.
It is common that RBI puts its nominees on the Boards of private banks. There were three RBI nominees on Dhanlaxmi Board earlier. However, with improvement in business, the central bank had withdrawn one last year. In the current context, the appointment of a new director is significant.
Early this month, the RBI had written to the bank to the Board seeking termination of a key executive—one chief general Manager, P Manikandan.
It was an unprecedented move from the part of the regulator to intervene in the matter of a CGM level officer. But the regulator was upset about the non-adherence to highest standards of corporate governance and Manikandan’s alleged involvement in board matters, according to people familiar with the development.
On the same day the bank received the letter from RBI, Dhanlaxmi’s Board met through a videoconference and sought Manikandan’s resignation.
Three board members had quit in June this year, including the Chairman, citing personal reasons.
The first one to quit was Sajeev Krishnan, part-time chairman and independent director. Krishnan had joined the Kerala-headquartered bank in February 2018 for three years. He had around eight months left when he quit on June 29.
The other two were KN Murali, independent director, and G Venkatanarayanan, an additional director. Both resigned with effect from June 29, 2020, before their terms came to an end. Murali joined the bank nearly a year and a half ago while Venkatanarayanan joined only a few months ago.
Following these exits, the bank had appointed new board members. These include PK Vijayakumar, G Rajagopalan Nair, G Subramonia Iyer and Suseela Menon R, also as additional directors (Independent Category) to the board.
Dhanlaxmi bank’s annual general meeting (AGM) is scheduled to be held tomorrow (30 September). There is speculation that a section of the shareholders may vote against the CEO.