Thrissur-based Dhanlaxmi Bank has joined a growing list of public sector and private sector banks witnessing board-level exits for various reasons. G Vijaya Raghavan, renowned technocrat and former member of the Kerala Planing Board, has resigned from the board of Dhanlaxmi Bank citing 'constant interference' by Reserve Bank of India.
“After a lot of thought, I have decided that I cannot compromise my independence, the values I follow or my credibility,” he said in his resignation letter accessed by
RAISING A HURDLE
When he was invited to the board, the biggest apprehension was that major shareholders may interfere in the decisions and that the unions might block the change efforts. “I am happy to state that they never tried to contact me at any time, but the union leaders met me on two occasions.
"The latter expressed their happiness and support for the work that we were planning to do and the changes that would be necessitated to take the bank to the next level.” However what was most surprising was that the RBI continued to be a block in the bank’s revival, Vijaya Raghavan said.
Whether this was because of policy or influence of vested interests will only be known over a period of time, he wondered.
PIECE OF ADVICE
“I have been looking at various developments that have taken place since I joined….and am disappointed with the manner in which RBI has been handling many critical issues.” It also does not make sense to continue, Vijaya Raghavan said in the letter. As a parting shot, he held out a piece of advice to the RBI as well as fellow board members ‘in the best interests of the bank.’
The RBI, he said, should immediately take a decision on a part-time Chairman by appointing either Chella Srinivasan or Sajeev Krishnan. “Even though mine was the second name on the recommended panel, I had made it clear that I will not be in a position to take on and do justice to the responsibilities,” Vijaya Raghavan said.
NEW CHAIRMAN, MD
The RBI should also decide on the selection of a Managing Director based on the panel recommended by the board. Until such time the MD joins, he should be asked to report to the Committee of Directors (COD), which should be given powers to take decisions on all policy matters and report to the board. “I am just an ordinary individual like all of you, I have a reputation that I have built over nearly four decades,” the letter said.
“I am not prepared to continue on a board where I lose my independence and have to act as a rubber stamp and whose decisions can be undermined by an officer sitting in the RBI.”
'VIGILANCE REQUIRED'
He requested shareholders and directors to closely watch out for any move to bring in external investors with a vested interest. They must also ensure that the new Chairman is not a back-door nominee of the RBI or a nominee of any group that may have a vested interest.
“I request that this letter be considered as my letter of resignation from the board of the Dhanlaxmi Bank Bank Ltd,” Vijaya Raghavan said. “I am sure if all of you work together and set aside petty differences for the overall benefit of the bank, it will within a short period get back to the glory that it enjoyed a few years ago.”