Hyderabad: Expressing concern about efforts are afoot to appoint large number of Sales Executives and Senior Executives in Dhanlaxmi Bank on Contractual and cost to Company basis at much higher remuneration, All India Bank Employees’ Association (AIBEA) said it strongly believe that Reserve Bank of India (RBI) role in the Board of Directors of the Bank should be reviewed.
Stating this in a letter to RBI Governor Saktikanta Das on Saturday, a copy of which was e-mailed to UNI late last night, AIBEA General Secretary Ch Venkatachalam said this will land the bank in a catastrophe and financial burden which, we apprehend, the Bank cannot bear and afford at this juncture.
He said if RBI does not effectively intervene in the affairs of this Bank now, once again it will run into problems. Slowly, the people and the customers of the Bank have regained their confidence and any reversal of the same would be suicidal for the Bank.
The AIBEA General Secretary added that the RBI would become answerable if things go bad.
You are aware that Dhanlaxmi Bank (originally Dhanalakshmi Bank) is a small sized private Bank with headquarters in Thrissur, Kerala. It is a 93-year-old Bank with a special flavour related to the needs of the economy and people of Kerala and later years somewhat grown with its presence in other States also.
Few years ago, particularly between from 2008 to 2012, this Bank was facing a lot of problem regarding its performance and was making losses. In the name of modernizing the Bank, the then top management of the Bank brought the Bank to serious problems and virtual mess. The Bank made a loss of more than Rs. 850 crore during that period, Mr Venkatachalam maintained.
With the intervention of RBI, change in top management, strengthening its capital base, and inducting some reputed people on the Board of Directors of the Bank, it has been making a turnaround and now the Bank has come into profit.
After making losses for continuously for 5 years, the Bank is making profit for the last 2 years and continuously for 8 quarters. The profit for the fiscal 2019-20 at Rs 65 Crore, is the highest since the Bank’s inception 9 decades ago.
In the beginning of this year, the top management has changed and in the recent months we are concerned to observe that perhaps the Bank once gain heading in the wrong direction.
Instead of consolidating the gains and further strengthening the Bank, we observe that efforts are on to change the business profile which are bound to land the Bank into difficulties, the top union leader said and added that a lot of Branches were earlier opened in north Indian States and the Bank got into problems due to inadequate control and supervision.
Hence, the situation arosed, including in the view of the RBI, and these decisions had to be reviewed as Bank had already closed many of those Branches. But we learn that attempts are again being made to open more Branches in Northern States when the Bank has inadequate infrastructure to manage the business in those areas.
Similarly, Cost to Income Ratio in this Bank is already high, and it goes without saying, that there is imperative need and necessity to improve the ratio substantially. We are sure that RBI would also be of the same view in this regard.
In view of the above, we seek your personal and urgent intervention into the affairs of the Bank to ensure that it once again does not face any bad weather, Mr Venkatachalam added.