Amid shareholders of Lakshmi Vilas Bank voting against the appointment of CEO and directors in the AGM, the bank sought to reassure depositors and said “bank’s liquidity position as on date is comfortable.”
The rejection of the appointment of top management comes at a time when the bank is desperately looking for capital and is in talks with the Clix Group for a merger.
It said that the bank continues to have a fully functional board including three independent directors and that till a new MD is appointed, existing senior management team and board to discharge daily affairs.
The bank’s liquidity position as on date is comfortable, with Liquidity Coverage Ratio (LCR) is in excess of 250%. The Bank continues to enforce cost reduction measures both of direct and indirect costs, the bank said in the regulatory filing.
Its provision coverage ratio remains healthy at 72.6%, against the minimum of 70.0% prescribed under PCA. Further, besides existing business, the Bank will continue its focus on capital-light loans.
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 cap raising via FPO, Rights issue, QIP or available routes.
“The Bank will continue the process of considering and evaluating the proposed amalgamation of the “Clix Group” with the bank, and as was previously informed on 15th September 2020, the mutual due diligence is substantially complete”, it further stated.
Additionally, to strengthen the bank’s capital, the shareholders have approved resolution authorizing the Bank to undertake capital raising as FPO, Rights issue, QIP or other available routes to raise capital.
Earlier today, the shareholders voted against the appointment of seven directors to its board, including that of S. Sundar as the managing director and chief executive officer, the bank said in a regulatory filing.
Besides, shareholders rejected the appointments of N. Saiprasad, K.R. Pradeep and Raghuraj Gujjar as non-executive and non-independent directors, and, those of B.K. Manjunath, Gorinka Jaganmohan Rao and Y.N. Lakshminarayana Murthy as non-executive and independent directors. These appointments were taken up for voting at the bank’s annual general meeting (AGM) on 25 September.