Is Dhanalakshmi Bank merged with which bank?
Today, a bank union demanded that Dhanalakshmi Bank, a Kerala-based lender, be merged with a nationalized bank. They claimed mismanagement. The All-India Bank Officers Association, which is the second-largest union for bank officers in India, called on the RBI to immediately merge Dhanalakshmi Bank and a nationalized bank to avoid conflicts of interest in the management of the bank’s affairs by the board and the top management. The bank acknowledged that some officers had been absorbed into the IBA scale in 2010 but stated that the number of contractual officers is greater than those employed under the Indian Banks Association scales.
It claimed that the Dhanalakshmi Bank Officers Union had brought this anomaly to the attention of the RBI. The general secretary of the officers union was fired in June 2015 without conducting an inquiry, while another official who did not have any direct involvement in the matter was jailed. The union created parallels between the current state of affairs at Dhanalakshmi Bank (previously Nedungadi Bank), which was merged into Punjab National Bank in 2003. The merger, which occurred over ten years ago, as a result of poor investment decisions and mismanagement. It warned that “Dhanalakshmi has been on the same path of deterioration.” The Thrissur-based Dhanalakshmi, which is based in Kerala, has been in financial trouble for more than four years. It reported a net loss in March 2015 of Rs 266.61 million.
Two private sector banks have put the functioning of older generation private banks in the spotlight. Lakshmi Vilas Bank(LVB and Dhanlaxmi Bank firing their chief executive officers in the space of one week, the Reserve Bank of India took a detailed look at their operations. Sources said that although there are not many strong supporters for these banks a few powerful investors are in control of the situation and are ready to take over or merge these banks.
Learn More: What is the net banking ID in Dhanlaxmi Bank?
Dhanlaxmi Bank, a Kerala-based bank, voted against Sunil Gurbaxani’s appointment as managing director and chief executive officer. However, the RBI had approved his appointment for a three-year period starting from the date he assumed control. Shareholders of LVB, a struggling bank, voted against seven directors being appointed to its board, including S Sundar, the MD, and CEO, as well as KR Pradeep, N Saiprasad, the promoters.
These banks have been around for many decades but they don’t have any promoters who could take them forward. South Indian Bank and Federal Bank are two other South-based banks that have operated as board-driven banks with no promoters. Karur Vysya Bank has a promoter stake of 2.11 percent, and Karnataka Bank doesn’t have one. These banks can be prime targets for takeover if the RBI agrees. Bank mergers or takeovers are not possible without approval from the central bank.