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APAC

Dhanlaxmi Bank shareholders vote to oust chief executive

MUMBAI (Reuters) - Shareholders of regional lender Dhanlaxmi Bank ousted its chief executive at its annual general meeting on Wednesday, the bank said in a regulatory filing.

More than 90% of shareholders who voted opposed the appointment of Sunil Gurbaxani, who had been approved by the Reserve Bank of India in February as CEO of Dhanlaxmi for a term of three years.

The bank’s regulatory filing did not give any reasons for the CEO’s ousting.

The All India Bank Employees’ Association (AIBEA) said employees and shareholders were not happy with the way Dhanlaxmi Bank was being run under the new CEO.

“Under the new CEO the bank was planning to expand its operations to north India and also hire 500 employees ... something which would not be feasible for a small south India-based regional bank,” C. H. Venkatachalam, AIBEA’s general secretary, said.

Dhanlaxmi Bank and Gurbaxani did not immediately respond to requests for comment on remarks made by AIBEA.

The association represents about 500,000 bank employees across India, including from Dhanlaxmi Bank.

Dhanlaxmi bank is a relatively small private Indian lender with 247 branches and a total deposit base of 111.09 billion rupees ($1.51 billion).

In a similar move last week, shareholders of another private Indian lender, Lakshmi Vilas Bank, voted against the reappointment of its CEO and six other directors. The bank had been struggling with bad loans and governance issues.

Shriram Subramanian, founder of proxy advisory firm InGovern, called such decisions by shareholders were rare but said it would make managements more accountable.

“In a way it is a good sign as shareholders have now realised that they have voting powers to make a significant decision,” said Subramanian.

Reporting by Nupur Anand; Editing by Aditya Kalra and Jane Merriman

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