RBI appoints 3 member panel to run day-to-day affairs of Lakshmi Vilas Bank

The Reserve Bank of India (RBI) has approved the constitution of a 3-member Committee of Directors in order to run the day-to-day affairs of the beleaguered Lakshmi Vilas Bank. They would exercise the discretionary powers of the MD and the CEO in the ad-interim.

The panel will be headed by existing Independent Director Meeta Makhan and the other two members of the panel are Shakti Sinha and Satish Kumar Kalra, who are also independent directors on the bank's board.

Last week, during the Annual General Meeting (AGM) of Lakshmi Vilas Bank, the shareholders had disapproved seven of the board members from continuing.

Deposits in the June quarter stood at Rs. 21,161 crore, down 27% from year-ago levels and 1.3% from a quarter ago. The deposit-holders, bond-holders, account-holders and creditors are well safe-guarded as the bank continues to have Liquidity Coverage Ratio (LCR) of about 262% as on September 27, 2020, as against a minimum 100% required by RBI.

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

The shareholders also voted against the re-appointment of statutory auditors (P Chandrasekar LLP, Chartered Accountants) and branch auditors. The branch auditor is appointed in consultation with the statutory auditor.

The Directors whose appointments were not cleared by shareholders include N Saiprasad, Gorinka Jaganmohan Rao, Raghuraj Gujja, KR Pradeep, BK Manjunath and YN Lakshminarayana Murthy.

According to people familiar with the development, shareholders rejected the appointments a time when the bank is facing a major financial crisis due to deterioration of asset quality and lack of capital.

The development comes at a time when the beleaguered Lakshmi Vilas Bank is in dire need of capital and is in talks with Clix Capital for a merger and to secure capital.