The All India Bank Officers’ Association on Friday said the Reserve Bank of India should initiate immediate steps to merge the loss-making Dhanlaxmi Bank with a nationalised bank.

In a statement, AIBOA General Secretary, S Nagarajan, claimed that there is conflict of interest in managing the affairs of the old generation private sector bank by the board and the top-level management team.

The Thrissur (Kerala) headquartered bank posted a loss in the last two financial years – Rs 241 crore in FY2015 and Rs 252 crore in FY2014. In FY2013, it made a small profit of Rs 2.62 crore.

The bank, which has 280 branches and 398 ATMs, had seen a rising trend in bad loans in the last three financial years. Gross non-performing assets jumped from 1.18 per cent of gross advances in FY2012 to 7 per cent in FY2015.

According to Nagarajan, developments in the bank were identical to those in Nedungadi Bank before it was merged with Punjab National Bank (PNB) in 2003.

“Mismanagement, wrong investment policies, coupled with the continuous derailment of the industrial relations climate were the causes leading to the merger of Nedungadi Bank with PNB,” said Nagarajan.

Pointing out that the officers’ union had brought to the notice of the Reserve Bank of India a fraud in one of the Mumbai branches under the ‘whistleblower's policy’, the AIBOA General Secretary said the exposure had led to the termination of the General Secretary of the bank’s officers’ union in June 2015 without conduct of an enquiry.

Dhanlaxmi Bank has been in ‘conflict mode’ with the officers working in the institution, he added.

As of March-end 2015, the top five shareholders were: B Ravindran Pillai (4.99 per cent stake), Shital Raghu Kataria (3.75 per cent), P Raja Mohan Rao (3.61 per cent), Antara India Evergreen Fund Ltd (3.44 per cent), and Kapilkumar Wadhawan (3.49 per cent).

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