Exit was outcome of being truthful and ethical: Dhanalaxmi Bank's Gurbaxani

In a Q&A the lender's MD and CEO dwells on the drama surrounding his ouster at the AGM and how the directors pressurised him to quit after he raised various Governance issues

On September 30, shareholders of Kerala-based Dhanlaxmi Bank voted against the lender's Managing Director and CEO Sunil Gurbaxani, who had been appointed for three years starting February 2020. Gurbaxani spoke to T E Narasimhan about the entire drama and how the Directors put pressure on him to quit after he raised various Governance issues. Excerpts:

How do you react to the recent outcome of the AGM?

I wasn't too surprised since the threat had come to me in person from two directors. They accused me of trying to clip the wings of their friend, who has been in the bank for the past 17-18 years. I said it's more about professionalism.

My predecessor gave him limited powers but he continued with unlimited administration and financial powers, which is not good governance. The bank doesn't have a policy to hire anyone after retirement in the CGM cadre.

The key shareholders who chose me as MD & CEO seven months back suddenly decided to go against me, which means they were solely relying on unverified news that was fed to them without verifying the facts and figures. They never asked me anything about those allegations against me.

A conspiracy was hatched behind the curtain which needs to be investigated. Just because I have raised serious governance issues I have become a victim.

My removal is a symbol of not bending or compromising on ethics and value. The exit should be seen as a result of staying truthful to ethics and governance and now allowing any comprise of those professional standards.

What are the key issues you have raised?

The issues are perennial; it's not about the seven months that I was there. My predecessors tried to address those chronic problems but couldn't. With my professional behaviour I didn't allow it to continue.

It all started in June, when the regulator also started noticing the attendance of Board meetings by a person who wasn't invited and didn't contribute to the meeting. The RBI took serious notice of it and asked him to resign.

Then appointing director at the age of 69-year just because he is a neighbour or friend for 30-35 years also speaks about the governance.

What about the rumours of the North lobby?

Smoke is created in the name of the North lobby. There isn't an iota of truth in it. No discussion ever happened about the money from coming from any other sources. Discussions on raising capital became a necessity because of Covid. The Board took a conscious view on the requirement of capital.

Some Board members and the Unions allege that some of the operational decisions you took, including expanding and focussing on North will put the bank in trouble. Despite the Board asking not to pursue, you were keen on opening up. Your reaction?

Nowhere have I said or spoken about opening new branches in the North. In fact we were closing down unprofitable or loss-making branches across the country.

Further, out of 40 loss-making branches, 15 were turned profitable within a quarter with special focus. A lot more can be done with proper technology/supervision.

How are Dhanlaxmi financials?

During the past six months, the performance of some business segments were better than that of the past six years. Total deposits have grown, current account savings account (CASA) grew by two per cent to 31 per cent, the new to bank business was also better and gold loans too grew well during the past three months.

Whatever we have done in the past three months was better than what we have done during the 12-month period ending March 2020.

Had I been allowed to continue, I would have taken the bank to new heights as I believe it has the potential to grow with roots in Kerala itself.

How is the capital position of the bank? Were you planning to raise any funds for growth?

The Bank is well capitalised and has headroom to grow. We have made enough provision for Covid. At the AGM approval was given to raise the authorisied capital Rs 300-400 crore. Bank will be ready to raise capital when it is required.