The Reserve Bank of India (RBI) has given its nod to the appointment of a three-member committee of directors to run the cash-strapped private sector lender Lakshmi Vilas Bank after the bank's shareholders voted out seven directors. The panel of three independent directors will manage the day-to-day affairs at the Chennai-based lender and exercise discretionary powers of the managing director and CEO, the Reserve Bank of India (RBI) said in a statement late on Sunday.
The committee will be chaired by Meeta Makhan and will have Shakti Sinha and Satish Kumar Kalra as members, the RBI further added.
The development comes days after the bank's shareholders, at the annual general meeting, rejected the appointment of seven directors, including the Managing Director, Chief Executive Officer and auditors.
Lakshmi Vilas Bank needs capital urgently due to deterioration in asset quality and has been scrambling to find a buyer since the past one year. It is reportedly in talks with Clix Capital for capital infusion and a possible merger. The RBI had earlier rejected a proposal for its merger with Indiabulls Housing Finance.
Meanwhile, Lakshmi Vilas Bank said that with its liquidity coverage ratio of about 262 per cent as on September 27 against a minimum 100 per cent required by the RBI, the deposit holders, bond holders, account holders and creditors are safe and added that it will continue to provide updates on developments when they materialise and as required by law.
Lakshmi Vilas' shares fell as much as 6.3 per cent in intra-day trading before bouncing back to end higher by 5.2 per cent at Rs 20.20 on the BSE.