The saga of leadership change at Dhanlaxmi Bank has taken a new turn, with the board offering chief executive designate P B Jayakumar an extension of two years as executive director — from March 1 to February 28, 2014.
According to sources, Jayakumar’s retirement was due this month. His appointment as managing director and chief executive officer of the Thrissur-based lender is subject to the approval of the Reserve Bank of India (RBI). Since the central bank is yet to sanction his new role, the bank has decided to extend his term as an executive director to ensure he is still employed with the lender when the approval is secured.
Jayakumar confirmed the development. "I have been given an extension for a period of two years as executive director. The board has nominated me as managing director and chief executive. They have forwarded a request to RBI, seeking approval for the appointment," he told Business Standard.
Jayakumar was nominated by the bank's board for this role earlier this month after former chief executive Amitabh Chaturvedi resigned from the position, following serious disagreement with other board members over the functioning and management of the bank's operations.
As chief executive designate, Jayakumar had written to the bank's employees, highlighting the need for an austerity drive, including salary cuts, to improve the bank's financial health.
Following his appointment, at least three senior executives have put in their papers. Salil Datar, head of branch banking and non-resident business, had resigned last week. "There were some changes in the reporting lines, and these were carried out without taking Datar into confidence.
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The new management is changing the power equations in a clandestine manner, without following any professional protocols. It seems to be in a hurry to adjust some of its own confidants into powerful roles, which seems to be the point of friction," said a source familiar with the development, requesting anonymity.
Datar could not be immediately reached for comments.
The bank's chairman, G N Bajpai, is scheduled to retire in the first quarter of the next financial year. Sources said the bank is yet to start the selection procedure for appointing the new chairman. "Normally, it takes about three months to complete the process. But this has not started yet," said a source familiar with the development.