Dhanlaxmi Bank: Restoring Trust

Shares of the private sector lender Dhanlaxmi Bank rallied 19.4% intraday today after the Reserve Bank of India (RBI) approved the appointment of Sunil Gurbaxani as CEO and Managing Director.

The RBI through its letter on February 20 has approved the appointment of Sunil Gurbaxani as Managing Director & CEO of the bank for a period of three years from the date of taking charge.

Currently, Gurbaxani is the Executive Vice President at Axis Bank.

The announcement comes as a relief for the lender which saw sudden exit of its T Latha, MD & CEO, in October 2019.

Ms Latha was appointed as MD and CEO of Dhanlaxmi Bank for three years following retirement of G Sreeram.

However, there were some questions raised on her appointment at Dhanalaxmi Bank. She was reportedly issued a charge sheet in the Punjab National Bank (PNB) Nirav Modi scam on 30 June 2018.

Ms Latha left PNB on 1 July 2018 to join Dhanalaxmi Bank. Meanwhile, recently Dhanlaxmi Bank was removed from the RBI prompt corrective action (PCA) framework, subject to certain conditions and continuous monitoring, as the bank is found to be not breaching any of the risk thresholds of the framework.

During the third quarter ended December, the bank reported a 26% rise in net profit to Rs 21.28 crore for the third quarter ended December, against Rs 16.90 crore during the corresponding period in previous fiscal.

Total income rose to Rs 285.85 crore from Rs 272.16 crore in October-December 2018-19, Dhanlaxmi Bank said in a regulatory filing.

The bank’s interest income rose to Rs 280.88 crore during the reported quarter from Rs 245.08 crore a year ago. Income from other sources also increased to Rs 34.97 crore as against Rs 27.08 crore in the year-ago period.

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