Vikram Akula, who had a troubled association with the company, will continue with SKS as a consultant’ till March 2012 and ‘assist with the transition’. Meanwhile, the company has appointed PH Ravikumar as its interim non-executive chairman
Mumbai: Founder and executive chairman of the country’s only listed microfinance institution SKS Microfinance, Vikram Akula, on Wednesday resigned from the board in wake of the huge losses suffered by the Hyderabad-based firm, reports PTI.
Mr Akula, who had a troubled association with the company, will continue with SKS as a consultant’ till March 2012 and ‘assist with the transition’. The company did not give any reason for his resignation.
Terming the resignation of Mr Akula as ‘voluntary’, it said it has appointed PH Ravikumar as its interim non-executive chairman.
After his resignation Mr Akula said, “The current leadership is well-equipped to take SKS into the next phase of its evolution. I will, of course, remain committed to the sector, and will continue my involvement in the industry at a policy level. I will also be involved in a mobile banking initiative.”
Speaking to reporters after a board meeting, SKS chief financial officer Dilli Raj told reporters, “Ravikumar, who has been an independent director with us for the past five years and chair of the audit committee for the past four years, has been appointed as non-executive chairman for the interim.”
Mr Raj said no severance package has been given to Mr Akula.
“On the issue of compensation, I confirm there is no severance package. If there is a compensation that is not material in comparison with our annual operating expenditure.”
The company had signed certain non-compete and confidentiality agreements with Mr Akula, who founded the company in December 1997 and made history when his initial public offer (IPO) was overbought 14 times and was listed with 11% premium over issue price of Rs985 in July 2010.
“The company has signed certain agreements with Mr Akula relating to confidentiality, non-compete clauses etc,” Mr Raj said, without going into specifics.
Mr Raj also denied reports that there was pressure from the board on Mr Akula to hang up his boots.
Mr Akula now holds around 3% stake in the company, in which PE firm Catamaran, set up by Infosys co-founder NR Narayana Murthy, is a major investor.
“Vikram turned an idealistic vision into a business that today serves millions of rural women. I have witnessed first hand the amazing impact SKS has had in India. But a lot more needs to be done,” Vinod Khosla co-founder of Sun Microsystems and a significant shareholder in SKS said.
Mr Akula, who founded SKS in late 1997, led the organisation until 2004 and became its poster boy with the massive success of the IPO. Then he joined McKinsey & Co in Chicago, only to return to SKS in 2005 and convert it to a for-profit company.
SKS was the first microfinance firm to go public in South Asia. SKS shares had touched a lifetime high of Rs1,402.30 on 28 September 2010.
But soon the bumpy ride began and the scrip fell to Rs640 on 18th November after crisis hit the Rs20,000-crore sunshine industry in Andhra Pradesh, its largest market, following an ordinance that massively curbed the industry’s operations.
The AP ordinance followed a spate of suicides by farmers, allegedly due to coercive methods adopted by collection agents.
SKS had also witnessed some low moments following the ouster of CEO Suresh Gurmani in October last year. Mr Gurmani, who was at the helm of the microfinance lender at the time of its dazzling IPO, was replaced by MR Rao.
The hike in rates is intended to make such funds more attractive at a time when the rupee has depreciated sharply during last few months
Mumbai: The Reserve Bank of India (RBI) on Wednesday hiked interest rates on Non-Resident (External) rupee term deposits and Foreign Currency Non-Resident (Banks) deposits, a move expected to increase the flow of foreign exchange amid the weakening domestic currency, reports PTI.
“Interest rates on fresh Non-Resident (External) rupee (NRE) term deposits for 1-3 years maturity should not exceed the LIBOR/SWAP rates plus 275 basis points, as on the last working day of the previous month, for US dollar of corresponding maturities,” the RBI said in a notification.
The interest rates will also be applicable to deposits with the maturity period exceeding three years and to deposits renewed after their present maturity period.
The interest rate on NRE deposits was LIBOR/SWAP rates, plus 175 basis points since November 2008.
The LIBOR rate is the average interest rate that leading banks in London charge when lending to other banks. The SWAP rate is the exchange rate associated with the fixed portion of a currency swap.
The revised rate will come into force with immediate effect.
“Interest rate on FCNR (B) deposits of all maturities contracted effective from the close of business in India as on 23 November 2011, will be within the ceiling rate of LIBOR/ SWAP rates plus 125 basis points for the respective currency/ corresponding maturities,” RBI further said.
The interest rate on these deposits was earlier LIBOR/ SWAP rates plus 100 basis points.
The hike in rates is intended to make such funds more attractive at a time when the rupee has depreciated sharply during last few months.
Falling for the eighth day in a row, the Indian rupee on Wednesday closed at 52.35/36—its all-time closing low—against the US dollar amid continuing signs of capital outflows and steep fall in stock markets.
As per the guidelines issued in 2010, no limit was placed for undertaking swaps to facilitate customers to hedge their foreign exchange exposures, but a “limit of $100 million was placed for net supply of foreign exchange in the market on account of swaps which facilitate customers to assume foreign currency liability”
Mumbai: The Reserve Bank of India (RBI) on Wednesday revised guidelines on foreign exchange derivative contracts, removing the cap of $100 million net limit by a bank on swap transactions, reports PTI.
The move will help companies to increase net supply of foreign currency.
“On a review, it has been decided to remove the above limit of $100 million placed for these swap transactions,” the RBI said in a notification.
As per the guidelines issued in 2010, swap transactions by banks acting as intermediaries were allowed by matching the requirements of corporate counter-parties.
While no limit was placed for undertaking swaps to facilitate customers to hedge their foreign exchange exposures, a “limit of $100 million was placed for net supply of foreign exchange in the market on account of swaps which facilitate customers to assume foreign currency liability”.
That means each bank had to observe a net limit of $100 million when exposure of all such swaps are combined.
According to experts, the move is intended to allow banks to sell more currency swaps to companies with overseas debt at a time when the currency market is highly volatile.
RBI had in December 2010 issued final guidelines on Over the Counter Foreign Exchange Derivatives and Overseas Hedging of Commodity and Freight Prices. The norms came into effect from February this year.
RBI had allowed companies having net worth of Rs100 crore to enter such contracts. However, companies were not allowed to write options on a stand-alone basis or enter into options such as leveraged structures and barrier options.