Dhanlaxmi Bank on Thursday said that the RBI has approved a three-member interim committee of directors, headed by G Subramonia Iyer, to run the private sector bank after the shareholders voted out its MD and CEO Sunil Gurbaxani. The shareholders rejected the resolution for appointment of Gurbaxani as MD and CEO at the 93rd Annual General Meeting of the bank held on September 30.

"Consequent to this, please note that Reserve Bank of India has, as requested by the Board of Directors, approved an interim arrangement for formation of a Committee of Directors to exercise the powers of Managing Director & CEO till such time a new MD & CEO takes charge," Dhanlaxmi Bank said in a regulatory filing.

The committee of directors (CoD) will be constituted with Iyer as chairman and G Rajagopalan Nair and P K Vijayakumar as its members, it said. "As advised by RBI, the interim arrangement will not continue beyond four months within which the bank will complete the process of identification and appointment of a new MD& CEO," it added.

As per the Scrutinizer's Report of the 93rd AGM of the bank, 90.49 per cent shareholders voted against Gurbaxani's appointment while only 9.51 per cent voted in favour.

Gurbaxani assumed office as CEO in February this year. A veteran banker, he has 35 years of experience with the State Bank of India Group and Axis Bank.

On Tuesday, RBI appointed D K Kashyap, General Manager at the central bank's Bengaluru Regional Office as an Additional Director on Dhanlaxmi Bank's board till September 27, 2022.

The RBI usually does not appoint its nominee on the boards of private banks unless there are exceptional circumstances to avoid any conflict of interest.

Dhanlaxmi Bank was put under the Prompt Corrective Action (PCA) framework by RBI in November 2015 due to deteriorating financial health. The lender came out of the framework, wherein various restrictions were imposed, only last year and since then it has been making profits.