RBI OKs Ajith Kumar K.K. as Dhanlaxmi Bank's new MD & CEO; Stock falls 2%.

Synopsis :  The RBI imposed penalties on ESAF Small Finance Bank, Dhanlaxmi Bank, and Punjab and Sind Bank on January 12 for non-compliance issues.

According to an April 19 exchange filing, Dhanlaxmi Bank has obtained RBI approval for the appointment of Ajith Kumar K.K. as its new Managing Director & CEO.

In a letter dated April 18, 2024, the RBI granted approval under Section 35B of the Banking Regulation Act, 1949, for Ajith Kumar K.K. to assume the role of MD & CEO at Dhanlaxmi Bank for a three-year term. Dhanlaxmi Bank's shares were trading down 2.28% at ?42.80 on April 19, 9:31 am on the BSE. With a market capitalization of ?1,082.89 crore, the bank's shares are 35% lower than its 52-week high of ?58.70.

Kumar is set to succeed J.K. Shivan as Managing Director and CEO.

The Reserve Bank of India (RBI) approved Dhanlaxmi Bank's request in January to extend Shivan's term as Managing Director and CEO until a successor assumes the role. Shivan's initial term concluded on January 29, 2024.

Kumar, a seasoned banker with more than 36 years of experience at Federal Bank, has occupied diverse leadership positions encompassing credit, human resources, business operations, and branch banking. According to the filing, he presently holds the position of Chief Human Resources Officer at Federal Bank with the rank of President.

A meeting of the bank's Board of Directors will be arranged soon to officially endorse the appointment. Following this, the appointment will be presented to the bank's shareholders for their approval, as stipulated by regulatory standards.

On January 12, the RBI levied monetary penalties of differing amounts on ESAF Small Finance Bank, Dhanlaxmi Bank, and Punjab and Sind Bank due to several instances of non-compliance.