Despite shareholders voting out seven directors, including the MD and CEO, at the AGM of Lakshmi Vilas Bank on Friday, the merger of the private sector lender with Clix Group will take place sooner than expected, asserted top bank officials.
On Sunday, the RBI approved a committee consisting of three independent directors to manage the day-to-day affairs of LVB. The committee, comprising chairperson Meeta Makhan, Shakti Sinha and Satish Kumar Kalra, has been vested with the discretionary powers of the MD and CEO in the interim.
“It is not a setback to the merger talks,” two top bank officials said, requesting anonymity.
“In fact, it is a blessing to the bank as the current situation has been noticed by the Reserve Bank, which has now appointed a Committee of Directors to manage the bank,” they said.
“The bank has kept the RBI notified about the merger talks at every stage. Shareholders have opposed the continuation of old directors and appointment of certain new directors,” they added.
“Shareholders don’t have anything against the merger or raising of funds,” the two officials said.
As on date, the bank has four independent directors and two RBI nominees.
In a statement Mr. Sinha said the interests of deposit holders, bond holders, account holders and creditors are protected as the bank had a Liquidity Coverage Ratio of about 262% on September 27, against a minimum 100% required by the RBI.
‘Merge with a PSB’
All India Bank Employees’ Association general secretary C.H. Venkatachalam mooted the idea of merging Lakshmi Vilas Bank with any south-based public sector bank, “to ensure that public depositors’ money is secured.”
Shares of LVB climbed 5.2% to ₹20.20 on the BSE on Monday.