New RBI nominee on the board of Lakshmi Vilas Bank

Troubled private sector lender Lakshmi Vilas Bank (LVB) said on Tuesday that Sundaram Shankar, General Manager at the Reserve Bank of India (RBI) Hyderabad regional office, has been appointed as additional director on the board for a period of two years.

He will replace Suvendu Pati, RBI's General Manager at Chennai regional office.

Shankar's appointment is in the exercise of powers conferred by sub-section (I) of Section 36AB of the Banking Regulation Act 1949, LVB said in a statement.

In September, the RBI has initiated prompt corrective action for LVB after Economic Offences Wing of Delhi Police began probing allegations of cheating and criminal breach of trust against its directors of the board.

The RBI's crackdown was on account high net non-performing assets, insufficient capital to risk-weighted assets ratio (CRAR) and common equity tier one (CET1) and negative return on assets (RoA) for two consecutive years, and high leverage based on on-site inspection under the risk-based supervision carried out for the year ended March 31.

Later, the central bank rejected LVB's merger plan with home financier Indiabulls Housing Finance.

Established in 1926, LVB is one of the oldest private sector banks based out of Tamil Nadu. As on March 31, its net advances stood at Rs 20,103 crore and deposits at Rs 29,279 crore.

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