The central bank on Sunday announced a panel that would oversee operations of old private-sector lender Lakshmi Vilas Bank a day after the Chennai-based struggling firm’s shareholders rejected the reappointments of seven directors.
The panel comprises three independent directors: Meeta Makhan (chairperson), Shakti Sinha and Satish Kumar.
And the seven directors whose reappointments were rejected include promoters N Saiprasad and KR Pradeep and chief executive S Sundar, the bank said in a bourse filing. Also, the shareholders have okayed an increase of the authorised share capital from Rs 650 crore to Rs 1,000 crore, the lender added, which is subject to a greenlight by the central bank.
This would allow fundraising that the lender said would be in the manner of a follow-on public offering, rights issue, qualified institutional placement or other available routes.
“With a liquidity coverage ratio of about 262% as on 27 September 2020, against a minimum 100% required by the central bank, the deposit-holders, bond-holders, account-holders and creditors are well safe-guarded,” the bank’s BSE filing added.
The bank said it will continue the process of considering and evaluating the proposed amalgamation of the “Clix Group" with the lender, and as was previously informed on 15 September, the mutual due diligence is substantially complete.
Last month, The Times of India report said the proposed majority stake acquisition of cash-starved Lakshmi Vilas Bank by AION Capital-backed SME lender Clix Capital may be called off over valuation issues.
The bank's provision coverage ratio remains healthy at 72.6%, against the minimum of 70% prescribed. Further, besides existing business, the lender will continue its focus on capital-light loans.
Lakshmi Vilas Bank is a southern-focussed private sector commercial bank with a network of 566 branches, five extension counters, 918 ATMs in 19 states and one Union Territory.
The bank reported a narrowed loss of Rs 112 crore for the quarter ending June, as compared with a loss of Rs 237 crore a year earlier. Total income during the quarter in review declined 20.4% year-on-year to Rs 539 crore.
Gross non-performing assets (NPAs) as a percentage of total loans deteriorated to 25.40% from 17.30% year-on-year but were flat sequentially. Net NPAs also worsened to 9.64% from 8.30% year-on-year but improved from 10.04% a quarter earlier.