The private lender on Saturday (26 September 2020) announced that its shareholders have voted against the appointment of seven directors including its chief executive officer to the board.
The shareholders rejected the appointments of S. Sundar as the managing director and chief executive officer; N. Saiprasad, K.R. Pradeep and Raghuraj Gujjar as non-executive and non-independent directors; and B.K. Manjunath, Gorinka Jaganmohan Rao and Y.N. Lakshminarayana Murthy as non-executive and independent directors. The shareholders also disapproved the appointment of P. Chandrasekar LLP, Chartered Accountants, Bangalore, as the statutory auditors of the Lakshmi Vilas Bank (LVB). These appointments were taken up for voting at the bank's annual general meeting (AGM) on 25 September 2020.
On 27 September 2020, the Reserve Bank of India (RBI) approved that day-to-day affairs of the bank will be run by a Committee of Directors (CoD) composed of three independent directors. Meeta Makhan would be the chairperson of the committee of directors and Shakti Sinha and Satish Kumar Kalra would be the member of the committee.
"With Liquidity Coverage Ratio (LCR) of about 262% as on 27th September 2020, against minimum 100% required by RBI, the deposit-holders, bond-holders, account-holders and creditors are well safe guarded, the bank said in a statement.
It further said that the bank continues to enforce cost reduction measures both of direct and indirect costs. The bank's provision coverage ratio remains healthy at 72.6%, against the minimum of 70% prescribed under PCA. Further, besides existing business, the bank will continue its focus on capital-light loans.
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All the existing employees of bank will continue to be in full service as usual, and remain ever committed as usual to serve customers. The shareholders have approved for increase of the authorized share capital of the bank to Rs 1,000 crore, subject to RBI approval.
The bank said it will continue the process of considering and evaluating the proposed amalgamation of the "Clix Group" with the bank, and as was previously informed on 15 September 2020, the mutual due diligence is substantially complete.
Additionally, to strengthen the bank's capital, the shareholders have approved resolution authorizing the bank to undertake capital raising as follow-on public offering (FPO), rights issue, qualified institutional placement (QIP) or other available routes to raise capital. Till a new managing director is appointed, the existing senior management team alongwith the board of directors will discharge the day-to-day affairs of the bank as usual.
LVB is a private sector commercial bank. The bank provides a variety of services, including corporate banking, commercial & personal banking, retail banking, NRI services, insurance and development banking. As on 30 June 2020, the bank had a network of 566 branches, 5 extension counters, 918 ATMs in 19 states and 1 union territory. Tamil Nadu is the dominant contributor of business for the bank.
The bank reported a loss of Rs 112.28 crore in Q1 FY21 as compared to a loss of Rs 237.25 crore recorded in Q1 FY20. Total income during the quarter declined 20.4% YoY to Rs 538.84 crore.
The LVB scrip was down 0.26% at Rs 19.15. It fell as much as 5.7% to hit the day's low at Rs 18.10 in morning trade today.
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