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More trouble for Dhanlaxmi Bank, says trade union

The DBOO has appealed to the new management to undo the damage done in the past three years by the previous team. This apart, the All India Bank Employees Association has appealed for merging Dhanlaxmi Bank with another public sector bank

Dhanlaxmi Bank Officers Organisation (DBOO), the trade union of the bank has hit out hard on the recently resigned managing director (MD) and chief executive officer (CEO) Amitabh Chaturvedi and its management for the poor plight of the bank and meticulously hiding all the facts from the public.

In a circular issued, DBOO said that the bank which booked profit of Rs57 crore in 2009, is about to show dismal result for the December 2011 quarter. The union has also refuted all stories published in the media crediting Mr Chaturvedi for the growth of the bank.

According to DBOO, “The leading business daily Economic Times dated 6th
 February reported the plight of the ex-MD who had increased the total business from Rs6,500 crore to Rs24,000 crore, who raised the pay  and  performance  linked bonus,  resigning from the bank  embittered  by the actions of notorious trade unions!  Shed your crocodile tears for the MD. What a brilliant show management.”

It adds that, “The former MD, Amitabh Chaturvedi was even claiming the credit for 100% core banking  implementation which in fact happened years before he took  charge of the bank. How cleverly the management hid the continually dwindling profit of the bank from public view.”

The circular states that the MD’s decision to resign ahead of its quarterly results announcement is a sign of more trouble for the bank. In fact, the DBOO also accused the media management team for projecting a growth story when the bank was in dire straits.  

Contrary to the media stories stating that Mr Chaturvedi’s decided to quit due to his difference with the management, DBOO says that, “…the apex bank, RBI (Reserve Bank of India), showed its displeasure on the MD after getting  the memorandum  from the AIBOC regarding the health of the bank. It is common man’s guess that the MD has put in his papers due to the intervention of RBI because of his non-performance.  However, he is still using his clout with the media to project himself as a martyr. A post mortem is needed to uncover the full dealings of the MD and his associates, right from October 2008 onwards.”

Moneylife was the first one to report the bruising battle between Dhanlaxmi Bank and its union. The All-India Bank Officers Confederation (AIBOC) alleged that the bank has manipulated accounts and provisioning, has a mismatch in asset-liability resources, maintains poor capital adequacy ratio and has huge dependence on call money borrowing. It has also accused the bank for ignoring social banking and financial inclusion. Subsequently, last year in November, the RBI conducted an inspection and issued a 15-point Monitorable Action Plan (MAP) to Dhanlaxmi Bank.

The trade union has also questioned the RBI for its inaction. “How could the banking regulator ignore the “early warning signals” and let the mismanagement continue for this long? Why this sudden reversal of fortunes:  The bank that was making a profit till the last quarter, report a dismal performance, all of a sudden?” the DBOO said in a statement.

The DBOO has appealed to the new management to undo the damage done in the past three years by the previous team. This apart, the All India Bank Employees Association (AIBEA) has appealed for merging Dhanlaxmi Bank with another public sector bank.

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COMMENTS

K B Patil

6 years ago

Truly, CEOs all over the world are given special treatment by the media. While the actions of politicians are scrutinised minutely, even when corporate honchos resign after making a mess of things and rendering several people jobless, their actions do not come under the scanner. They bail out with a golden parachute! For instance, Essar Steel's promoters made a mess of the steel business (when the industry was booming) and booted out minority shareholders by a farcical process of delisting. Yet, you have the business magazines sympathising with them over their recent problems.

Jagadees

6 years ago

Why AIBEA appeal for merger with other public sector bank? why not a private sector bank?? May be they will make them to work more!!!

S Prabhu

6 years ago

No staff accountability. MD and the top management made crores of rupees on salary, bonus and esops. How long this will continue? Why RBI wants to issue more licenses instead of consolidations? Why it takes long years for Regulatory Authorities to understand the internal situations of the bank. Its time now for the RBI to appoint its nominee director on each banks board and make them accountable. Dhanlaxmi is not the exception, there are other private banks who adopted the mass malpractices in accounting under the able guidance of foreign consulting firms and their NPA levels are coming down and down on the paper, but the actual situation GOD and the consulting firm knows.

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