The Reserve Bank of India has cut short the tenure of Dhanlaxmi Bank's Additional Director Edasseri Madhavan by around five months, though the reason for his removal before end of his term is not clear. "It is hereby informed that the appointment of E Madhavan as RBI Additional Director on the Board of the Bank has been discontinued by RBI w.e.f October 19, 2018," Dhanlaxmi Bank said in an exchange filing.
Madhavan served as General Manager of Reserve Bank of India before joining Dhanlaxmi Bank on May 11, 2017. Before that, Madhavan worked as additional non-independent director of Dhanlaxmi Bank from December 11, 2015, till September 29, 2016. He had also worked as director of the bank from February 28, 2003 to April 2005.
Meanwhile, the share of Dhanlaxmi Bank, whose market cap is Rs 297.04 crore, traded at Rs 11.80 at 1.49 pm on Monday. The share opened 20 points above its previous day close of 11.75.
Madhavan's exit before the set tenure appears to be in line of the RBI's increased scrutiny of CEOs in private banks and board members. Recently, the regulator approved the appointment of Sandeep Bakhshi as ICICI Bank's MD and CEO for only three years against the five-year term sought by the ICICI Bank.
Similarly, Axis Bank's next CEO Amitabh Chaudhry also received a nod for three years only, starting January 1 and ending on December 31, 2021. Its previous boss Shikha Sharma's term was also cut short by the central bank. Despite Yes Bank shareholders approval for Rana Kapoor's re-appointment as the MD and CEO for three years in June, the RBI curtailed his term only till end-January.