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Dhanlakshmi Bank to sell 15% holding in Destimony

Dhanlakshmi Bank Friday said it may sell its 15% holding in New Silk Route controlled Destimony Securities, the company said in a news release.
The Kerala-based bank decided to sell its stake after the Reserve Bank of India raised objections to the old-generation private sector bank being categorised as the dominant promoter group.
The central bank wants to ringfence the banking entity from any possible capital shock if the broking company faces any hardships in the future.
Meanwhile, in October 2010, Dhanlaxmi Bank had picked up 15% stake in the company for Rs 13 crore. Since the change in the management, the bank has been under the RBI glare.
PG Jaykumar, Managing Director and CEO, Dhalaxmi Bank said, “The bank’s board will meet on March 28 and we will present the Reserve Bank of India’s view.” He also said, “The decision will be taken in consultation with the board.”
Destimony Securities is a Securities Exchange Board of India-registered company. Dhanlaxmi Bank has been categorised as a dominant promoter group as a part of the know your investor guidelines.
The bank reported a net loss of Rs 36.46 crore in the quarter ended December 2011 as against a profit of Rs 7.26 crore in the corresponding period last year. Its expenses surged 41.74% to Rs 126.55 crore in the December quarter. Its capital adequacy ratio fell 9.88% from 13.39% in December 2010 and the net-non performing assets of the bank stood at 0.35%.
Dhanlaxmi Bank Ltd is an old private sector bank based in Kerala. The bank is headed by its managing director and CEO Amitabh Chaturvedi until January this year. Meanwhile, in February 2011, Amitabh Chaturvedi resigned from the services of the bank.
Source: Business Review India

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