Tag: dhanlaxmi bank

Dhanlaxmi Bank Part-Time Chairman G Subramonia Iyer resigns, BFSI News, ET BFSI

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Dhanlaxmi Bank on Thursday said its Part-Time Chairman G Subramonia Iyer has resigned, on personal grounds. “G Subramonia Iyer, part-time chairman and independent director of the bank, has submitted his resignation from the board of directors of the bank vide his letter dated December 2, 2021,” the bank said in a regulatory filing.

His resignation is to be effective from December 31, 2021, it added.

“G Subramonia Iyer has informed that he was tendering his resignation owing to certain urgent and emergent domestic and personal reasons and there were no other material reasons for his resignation,” it added.

Shares of Dhanlaxmi Bank on Thursday closed at Rs 14.14 apiece on the BSE, down by 0.42 per cent from the previous close.

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Dhanlaxmi Bank’s part-time chairman resigns from board

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Sources in the bank said that Iyer resigned due to health reasons.

Dhanlaxmi Bank said in a regulatory filing on Thursday that part-time chairman and independent director of the bank G Subramonia Iyer has submitted his resignation from the board of directors of the bank, owing to certain urgent and emergent personal reasons.

The Kerala-based bank has been in the news recently for all the wrong reasons, including an RBI advisory to ensure transparency in the nomination process of directors and follow best corporate governance practices. Sources in the bank said that Iyer resigned due to health reasons.

The lender currently has just five directors against the maximum strength of 11. It also has two RBI nominees on board as additional directors. It does not have a chartered accountant on board as director after the tenure of the former chartered accountant-director ended on September 30,2020. Some shareholders,including former directors, have also approached the court after the bank board rejected their candidature, moved under Section 160 of the Companies Act. The bank reported a 74% year-on-year decline in its second quarter net profits to `3.66 crore, with bad loans increasing.

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Dhanlaxmi Bank Q2 net plunges 74% as bad assets rise

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In value terms, gross NPAs increased to Rs 604.15 crore from Rs 448.72 crore in the year-ago period.

Dhanlaxmi Bank on Friday reported a 74% year-on-year (Y-o-Y) decline in its net profit to Rs 3.66 crore for the quarter ended in September 2021 as provisions rose due to a spike in bad loans. The Thrissur-based lender had reported a net profit of Rs 14.01 crore in Q2 of FY21 and Rs 6.79 crore in the preceding quarter.

Provisions and contingencies have increased by 422% to Rs 22.40 crore, as against Rs 4.29 crore in the year-ago period.

The asset quality has worsened with gross NPA as a percentage of gross advances rising to 8.67% for the quarter under review, against 6.36% in the second quarter of last fiscal and 9.27% in Q1 of FY22.

The net NPA ratio was reported at 4.92%, compared to 1.66% reported in the year-ago period and 4.58% in the first quarter of the current fiscal.

In value terms, gross NPAs increased to Rs 604.15 crore from Rs 448.72 crore in the year-ago period.

The total income for Q2 of FY22 was higher by 6.7% YoY to Rs 266.59 crore, while the bank’s interest income falling to Rs 229.01 and other income increasing to Rs 37.58 crore from Rs 5.69 crore in the comparable period of last fiscal.

The provision coverage ratio (including technical write-off) as of September 30, 2021, was 74.18% and the capital adequacy ratio stood at 13.64%.

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Dhanlaxmi Bank Q2 net declines 74pc at Rs 3.66cr on soaring bad assets, BFSI News, ET BFSI

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Dhanlaxmi Bank on Friday reported a nearly 74 per cent plunge in its net profit to Rs 3.66 crore in quarter ended in September 2021 as provisions rose due to a spike in bad loans. The private sector bank had posted a net profit of Rs 14.01 crore in the corresponding period a year ago.

Total income of the bank during the July-September period of 2021-22, however, grew to Rs 266.59 crore from Rs 249.66 crore in the same period of 2020-21, Dhanlaxmi Bank said in a regulatory filing.

Interest income was down at Rs 229 crore in Q2FY22 from Rs 243.97 crore in Q1FY21, even as the other income was higher at Rs 37.58 crore, as against Rs 5.69 crore.

Provisions for the bad loans and contingencies for the reported quarter rose to Rs 22.40 crore from Rs 4.29 crore in September 2020.

The bank’s gross non-performing assets (NPAs) rose to 8.67 per cent of the gross advances as of September 30, 2021, from 6.36 per cent in the year-ago same period.

However, sequentially from gross NPAs were down compared to 9.27 per cent in June 2021 quarter. Value-wise, the gross NPAs were worth Rs 604.15 crore, up from Rs 448.72 crore.

Net NPAs too rose to 4.92 per cent (Rs 329.55 crore) from 1.66 per cent (Rs 111.45 crore).

“During the quarter ended September 30, 2021, NPA for which provision had already been made amounting to Rs 7,786 lakh has been technically written off,” the bank said.

Provision coverage ratio (including technical write off) as of September 30, 2021 is 74.18 per cent, it added.



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RBI empanells Dhanlaxmi Bank as Agency Bank

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Thrissur-based Dhanlaxmi Bank has been empanelled as ‘Agency Bank’ by the Reserve Bank of India to undertake general banking businesses of Central and State governments on behalf of the RBI.

Dhanlaxmi Bank entered into agreement with the RBI at the Department of Government and Bank Accounts (DGBA), Reserve Bank of India, Mumbai.

It is now authorized to undertake transactions related to government businesses such as revenue receipts and payments on behalf of the Central and State governments, pension payments in respect of Central and State governments, works related to small savings schemes (SSS), collection of stamp duty through physical mode or e-mode, and any other item of work specifically devised by the RBI as eligible for agency commission.

Also see: Dhanlaxmi Bank shareholders reject appointment of auditors

Dhanlaxmi Bank has 245 branches spread across 15 States and Union Territories. The Bank has an excellent technology team in creating customised solutions for customers, thereby providing flexibility and ease of banking while leveraging in-depth understanding of customer needs.

Shivan J K, Managing Director and CEO, Dhanlaxmi Bank, said, “We are proud to be one among the private sector banks empanelled by the RBI to facilitate transactions related to government businesses.

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RBI advises Dhanlaxmi Bank to ensure transparency in nominating directors

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“It is a truncated board and they want to keep it that way to have a controlling stake. It helps them to take unilateral decisions against shareholders’ interests, corporate governance, Companies Act, Sebi LODR and even RBI circulars,” sources added.

The Reserve Bank of India (RBI) in June had advised Dhanlaxmi Bank to ensure transparency in the nomination process of directors and follow the best corporate governance practices. The regulator also directed the bank to expedite and complete the process of appointment of directors.

The lender currently has just 5 directors, against the maximum strength of 11. It also has two RBI nominees on the board as additional directors. Dhanlaxmi does not have a chartered accountant on board as director after the tenure of the former chartered accountant-director ended on September 30, 2020.

The board kept in abeyance the recommendations of the nomination and remuneration committee of the bank, including the reappointment of prominent investor Ravi Pillai.

Following that, five individuals, including two former directors and Ravi Pillai, moved their candidature under Section 160 of the Companies Act. It was rejected by the board and not placed for consideration of the annual general meeting.

According to sources privy to board deliberations, there is a concerted attempt by some board members to delay the appointment of directors.

“It is a truncated board and they want to keep it that way to have a controlling stake. It helps them to take unilateral decisions against shareholders’ interests, corporate governance, Companies Act, Sebi LODR and even RBI circulars,” sources added.

A board member, however, told FE that the RBI wants to make sure that the independent directors are truly independent and qualified.

“All the candidates for the board were brought by the shareholders. RBI has two directors on board and wants to make sure that all the recommendations are scrutinised properly. No one on the board is against Ravi Pillai’s candidature. It was only deferred for the time being,” sources said.

The Kerala High Court on Wednesday directed Dhanlaxmi Bank to refrain from concluding the annual general meeting scheduled for Wednesday (September 29). The single bench of the high court gave an interim order directing the bank to adjourn the AGM to a day after one month after transacting the businesses included in the agenda for the meeting.

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Dhanlaxmi Bank’s auditors under spotlight as shareholders reject their appointment, BFSI News, ET BFSI

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Statutory auditors of Dhanlaxmi Bank, PB Vijayaraghavan & Co, have come under the spotlight after the shareholders of the Kerala-based lender rejected their appointment at its 94th Annual General Meeting held on Wednesday (September 29), the scrutinizer report filed to the stock exchanges on Thursday showed.

Over 65 per cent of the votes were cast against the resolution to appoint PB Vijayaraghavan & Co as the bank’s statutory auditors. For an ordinary resolution to be passed, more than 50 per cent votes need to cast for the resolution.

PB Vijayaraghavan & Co were seeking reappointment for the third year (FY2021-22), and proposed to be paid a total fees of Rs 48 lakh by Dhanlaxmi bank. The Reserve Bank had already accorded approval for their appointment. The Chennai-based auditors, were the branch/ statutory central auditors of the bank during the period 2003-04 to 2008-09, FY 2019-20 and for FY 2020-21, Dhanlaxmi Bank’s annual report for 2020-21 showed.

P B Vijayaraghavan’s rejection as statutory auditors came at a time when Dhanlaxmi Bank’s financial health has been under question and the lender is also facing issues of corporate governance. The auditors, P B Vijayaraghavan, gave a clean chit to the bank in the last two years, issuing an “unqualified opinion”, the bank’s annual reports for FY20 and FY21 showed.

“It seems that the shareholders aren’t happy with the bank’s performance in the recent times and have shown their anger by rejecting the appointment of the statutory auditors,” Shriram Subramanian, MD at proxy advisory firm, InGovern told ETCFO.

Another expert echoed the same point. “It is possible that statutory auditors of the bank were not adequately questioning the management and therefore their independence was seen under doubt by the shareholders, which possibly led to their ouster,” said Mohit Saraf, founder & managing partner, Saraf & Partners.

Shares of Dhanlaxmi Bank closed 0.94 per cent higher on the BSE.



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Dhanlaxmi Bank shareholders reject appointment of statutory auditors

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Shareholders approved the ‘Profit &Loss Account’ for the year ended and the re-appointment CK Gopinathan as a director.

Shareholders of Dhanlaxmi Bank have rejected the appointment of statutory central auditors in the annual general meeting (AGM) held on Wednesday, the bank said in a regulatory filing. Incidentally, the Kerala High Court has refrained the bank from concluding the AGM and has adjourned it to a day after one month from September 29th.
The shareholders also rejected the resolution of authorizing the board of directors to appoint and fix the remuneration of branch auditors.

In a show of strength and defiance to the current board, the shareholders passed two resolutions while voting against the other two. Shareholders approved the ‘Profit &Loss Account’ for the year ended and the re-appointment CK Gopinathan as a director.

According to the regulatory filing, 65.44% of the shareholders present in the AGM voted against the proposal to appoint P B Vijayaraghavan & Co, Chartered Accountants, as statutory auditors and appointment of branch auditors.
The order by the HC came following a writ petition filed by KN Madhusoodanan, a shareholder of the company, P Mohanan and Prakash DL, seeking a direction to the respondents — the RBI and Dhanlaxmi bank — to discharge their statutory responsibilities under Section 160 of the Companies Act to inform the members about the candidature of the petitioners for the office of the director as mandated under Section 160(2) of the Companies Act.
Sherry Samuel Oommen, a corporate lawyer, told FE that it would have augured well for the shareholders of Dhanlaxmi to adjourn the AGM in its totality.

“The Ministry of Corporate Affairs in a circular in 1974 had permitted companies to adjourn the AGM where accounts were not ready for laying at the concerned AGM. Perhaps, in the interests of the public, the matter concerning adoption of accounts and appointment of auditors could have been adjourned to the ensuing AGM. I am quite certain that this matter would be further litigated in the next month,”he added.

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Kerala High Court asks Dhanlaxmi Bank to adjourn AGM

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The petitioners had to move their candidature under Section 160 of the Companies Act after the board decided to defer their candidatures.

The Kerala High Court on Wednesday directed Dhanlaxmi Bank to refrain from concluding the annual general meeting scheduled for Wednesday (September 29). The single bench of the high court gave an interim order directing the bank to adjourn the AGM to a day after one month after transacting the businesses included in the agenda for the meeting.

The order by Judge PB Suresh Kumar came following a writ petition filed by KN Madhusoodanan, a shareholder of the company, P Mohanan and Prakash DL, seeking a direction to the respondents — the RBI and Dhanlaxmi bank — to discharge their statutory responsibilities under Section 160 of the Companies Act to inform the members about the candidature of the petitioners for the office of the director as mandated under Section 160(2) of the Companies Act.

The board of the bank arbitrarily rejected the applications of all five candidates, including prominent shareholder Ravi Pillai (B Ravindran Pillai) and former independent director PK Vijayakumar, filed under Section 160 of the Companies Act, a highly-placed source told FE. The petitioners had to move their candidature under Section 160 of the Companies Act after the board decided to defer their candidatures.

“The HC interim order has upheld the importance of shareholders in appointing directors. The bank rejected applications without any valid reasons. The AGM is supreme for any company, including banking company. Some of the directors who came to that position with the votes of majority shareholders are now behaving as if they were made directors by some other authority, and not by shareholders. The interim order of HC is an eye opener for all who try to belittle importance of shareholders in the administration of any company,” PK Vijayakumar said.

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Fresh troubles surface for Dhanlaxmi Bank

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A shareholder and two others have approached the court against the board’s decision of rejecting their candidature for the office of director, to be placed before members during the annual general meeting scheduled for September 29.

Problems seem to be never ending for Dhanlaxmi Bank, with major shareholders, including NRI Ravi Pillai, engaging in conflict with the board of directors.

A shareholder and two others have approached the court against the board’s decision of rejecting their candidature for the office of director, to be placed before members during the annual general meeting scheduled for September 29.

KN Madhusoodan, a shareholder of the company, P Mohanan and Prakash D L have approached the court seeking a direction to the respondents – RBI and Dhanlaxmi bank – to discharge their statutory responsibilities under Section 160 of the Companies Act to inform the members about the candidature of the petitioners for the office of the director as mandated under Section 160(2) of the Companies Act.

The board of the bank arbitrarily rejected the applications of all five candidates, including prominent shareholder Ravi Pillai ( B Ravindran Pillai) and former independent director PK Vijayakumar, filed under Section 160 of the Companies Act, a highly-placed source told FE.

The petitioners had to move their candidature under Section 160 of the Companies Act after the board decided to defer their candidatures.

“The action of the board has no basis in law as the names of P Mohanan and Prakash were previously cleared by the Nomination and Remuneration Committee during its meeting held on July 23, 2021,” sources said.

“It is a truncated board and they want to keep it that way to have a controlling stake. There are only 8 directors, including 2 RBI nominees, and it helps them to take unilateral decisions against shareholders’ interests,”sources added.

Ravi Pillai holds a 10% stake in the lender and was on the board till May 2020. He had to exit on turning 70. Later, the RBI raised the age limit for non-executive directors, including the chair, to 75. CK Gopinathan and his two family members together hold close to 10% in the bank. NRI MA Yussuffali and Kapil Wadhawan own a 5% stake.

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