Three-member panel to run Lakshmi Vilas Bank

The Reserve Bank of India (RBI) on Sunday approved the formation of a three-member committee of directors to temporarily run the struggling Lakshmi Vilas Bank Ltd after shareholders voted out seven directors, including managing director and chief executive S Sundar.

The plan will exercise the discretionary powers of the chief executive and will be headed by existing independent director Meeta Makhan, the bank said in a statement. The other two members of the panel are Shakti Sinha and Satish Kumar Kalra, who are also independent directors on the bank’s board.

Earlier in the day, the bank said it does not have any asset-liability mismatch and is successfully fulfilling its commitments to deposit-holders, bond-holders, account-holders and creditors.

These appointments were taken up for voting at the bank’s annual general meeting (AGM) on September 25.

Shareholders voted against these appointments, because of the bank’s growing levels of non-performing assets and uncertainty related to its ability to continue as a going concern, said an institutional investor, requesting anonymity.

The development comes at a time when the bank is desperately looking for capital and is in talks with the Clix Group for a merger. The bank’s capital adequacy ratio as per Basel III guidelines contracted to 0.17 % as on 30 June, and its loss narrowed to Rs 112.28 crore in Q1 from Rs 237.25 crore a year ago.