In a hasty move on Thursday, Kerala-based Dhanlaxmi Bank managing director and chief executive officer T Latha resigned, just over a year after she assumed charge.
Official sources said she quit because of "personal reasons".
In a filing to the stock exchange, the bank said, "This is to inform that Ms T. Latha has submitted her resignation as MD & CEO and Director of the Bank, vide her letter dated October 30, 2019, due to personal reasons." The board has accepted her resignation.
The move comes as a surprise as the bank reported a healthy growth of 81.6 per cent year-on-year in its September quarter profit at Rs 22.1 crore, with sharp fall in non-performing assets.
The growth was driven by strong operating profit, other income and NII.
Sources inside said there was pressure from within the board which forced her to quit after being appointed by the RBI in July 2019
Union sources said they did "not know what prompted her to take such a step in haste".
They admitted that their relation with the management in general and with Latha in particular was 'merely normal' and that she had been trying to keep the bank afloat. She had a few days ago met union leaders to offer Diwali greetings and discussed ways to improve bank business.
Pressed on whether their relationship with the CEO was healthy, they were non-committal.
Those in the knowhow, said the going within the board was not smooth. Two leading Kerala businessmen had 10 per cent holding each and were on the board.
Latha had succeeded in bringing the bank "out of the ICU" and helped it report impressive profit growth in the last two quarters.
This was mainly owing to bringing down the NPAs through recovery of some old bad loans. This helped in the release of provisionings made earlier. But this is temporary and not sustainable.
But on the business front, the bank has been facing an uphill task. Over the last two decades, the bank, which has been under a cloud of takeover, has not seen any substantial growth in its loan book, except a minor rise in the last two quarters.
Business has not been growing which continued to make the going tough for the bank. The resignation could plunge the bank into further crisis, they admitted.