The Reserve Bank of India (RBI) has approved a three-member committee of directors to run the day-to-day functioning of cash-strapped Lakshmi Vilas Bank.
The development comes a few days after its shareholders rejected the appointment of seven directors, including the Managing Director, Chief Executive Officer and auditors at the annual general meeting.
The shareholders rejected the appointments a time when the private sector lender is facing a major financial crisis due to deterioration of asset quality and lack of capital.
LVB is in dire need of capital and has been scrambling to find a buyer. The private lender is in talks with Clix Capital for a merger and secure the much-needed capital.
In a statement issued late on Sunday, LVB said the RBI-approved three-member committee of directors will exercise the discretionary powers of Managing Director and Chief Executive Officer in the ad-interim.
The committee chairperson is Meeta Makhan with Shakti Sinha and Satish Kumar Kalra as members. All three are independent directors.
"With liquidity coverage ratio of about 262 per cent as on September 27, against a minimum 100 per cent required by the RBI, deposit holders, bond holders, account holders and creditors are well safe-guarded," said the statement.
The bank will continue to share information on the developments in the public domain as and when they materialise and as required by applicable law, it said.