THREE MEMBER COMMITTEE APPROVED

THREE MEMBER COMMITTEE APPROVED BY RBI TO ACT AS AN AD-INTERIM MD & CEO OF LAXMI  VILAS BANK

 

The Reserve Bank of India (RBI) has allowed a Committee of Directors (CoD) composed of three independent directors to run the day-to-day affairs of Lakshmi Vilas Bank (LVB). This CoD will exercise the discretionary powers of MD & CEO temporarily.

 

 

Meeta Makhan, Chairperson of the Committee of Directors and members Shakti Sinha and Satish Kumar Kalra, will now run the operations, as part of the CoD, as approved by the central bank.

 

Certain news items have appeared, expressing concerns about the governance of the Bank, it said in the release. LVB said its liquidity position is “comfortable as on date”, and that its Liquidity Coverage Ratio (LCR) is at about 262 percent, against minimum 100 percent required by RBI.

 

The Bank said it continues to enforce cost reduction measures for both direct and indirect costs. It added that the bank’s provision coverage ratio (PCR) remains healthy at 72.6 percent, against the minimum of 70 percent prescribed under prompt corrective action. Besides existing business, the Bank said it would continue its focus on "capital-light loans."

 

The existing Senior management team along with BOD will discharge day to day operations of Bank till a Managing Director is appointed.

 

At the bank’s AGM held on September 25, shareholders had rejected the appointment of S Sundar, MD & CEO of the bank, and that of six other non-executive, non-independent directors of Bank,however appointment of three Directors  was approved by shareholders.LVB has two other Directors on Board appointed by RBI.

 

Lakshmi Vilas Bank said that all the existing employees would continue to be in full service as usual, and remain ever committed as usual to serve customers.

 

At the AGM,shareholders had also approved increasing the Authorised Share Capital of Bank to Rs.1000 crores,subject to RBI approval.Raising of funds through other routes like FPO,QIO,Rights Issue or other available routes was also approved in the meeting by shareholders.

 

“The Bank will continue the process of considering and evaluating the proposed amalgamation of the Clix Group with the Bank, and as was previously informed on 15th September 2020, the mutual due diligence is substantially complete,” it added.

 

LVB reported gross non-performing assets of over 25 percent, and net non-performing assets of almost 10 percent for the June quarter. As against the minimum requirement of 8.875 percent tier-1 capital ratio, LVB reported only -0.88 percent capital.