By IANS,
Thiruvananthapuram : The Dhanalaxmi Bank has dismissed as having “no merit” ongoing campaigns allegedly aimed at maligning the institution and raising doubts about the financial health of the 87-year-old Kerala-based bank.
Bank’s managing director and CEO Amitabh Chaturvedi said: “The main reason why canards and baseless allegations are spread against us is because the new recruits have been told that they would be unable to be part of any trade union.”
He told reporters that since he took over, the bank went on a massive hiring spree and today the total number of employees has gone up from 1,298 to 4,600.
“It is just 26 percent of our employees who are part of a trade union. May be this is one reason why we are being maligned, but we will stand firm and move ahead very strongly and our aim of becoming a new generation bank will become a reality,” said Chaturvedi.
He said that he had completed three years in the bank and the Reserve Bank of India (RBI) had given him the nod for a second term.
“The news spread by the adversaries was that I would not get an extension and that has now been proved otherwise. The other campaign was that the headquarters of the bank is being moved from Thrissur in the state to Mumbai. This is another baseless allegation,” said Chaturvedi.
The reaction from the bank came hours after former state finance minister Thomas Issac moved a submission in the assembly asking the government to intervene to save the bank.
Issac said that a lobby from outside the state was doing its best to cause havoc to the bank and, as a result, the credit-deposit (CD) ratio of the bank in the past three years had hovered in the range of 40 percent, while the state average was in the range of 75 percent.
“The net profit of the bank plunged from Rs.58 crore in 2008-09 to as low as Rs.2 crore in the first quarter of this fiscal. The accounts of this bank are fudged and the RBI is investigating into it. Moreover the bank’s priority sector lending is now providing re-finance to a non-banking financial companies (NBFC) which are primarily into lending money at exorbitant interest rates by taking gold from poor Keralites,” said Issac.
Chaturvedi denied the allegations and pointed out that there was no investigation by the RBI.
“The RBI has just completed the annual financial inspection of the bank in August and things are fine. The guidelines are very clear and we do business with NBFCs in Kerala but that business does not come under the priority sector lending,” said Chaturvedi.
He said after he took over the bank, 66 new branches were opened since 2008-09, taking the total branch network to 275.
“The CD ratio of our bank, in comparison to four others which are in our category, is on par and we have now a CD ratio of 53 percent. We started 66 new branches and for a branch to break even it takes around 18 months,” said Chaturvedi.
This appears to have been reflected in their second quarter performance for the current fiscal when the bank’s net profit increased by 168 percent to Rs.35 crore from Rs.1.62 crore in the corresponding period.
He said that the allegation that the bank was being closely held by a lobby was baseless because 35 percent of the shares were held by financial institutional investors, 10 percent by mutual funds and insurance companies and 7.34 percent by an individual and the rest were with the public.
“There is no group and no lobby and the current share value is Rs.65. Our figures will speak for us and we are no longer a small bank instead we are now a mid-sized bank and we will be headquartered in Thrissur and you will all see our state-of-the-art new building being opened shortly in Thrissur,” said Chaturvedi.