Page 8 - Banking Finance October 2020

BANK UPDATE

that in case the latter retires or is bank if the need arises. In this regard, growth in July 2019. Within this sector,
ousted, the dayto-day affairs of the Ravi emphasised that all public sector vehicle loans registered accelerated
bank can be conducted without a banks and large private sector banks growth of 8.1 per cent in July 2020 as
hitch. have Executive Directors who can dis- compared with the growth of 4.9 per
charge the functions of the MD and cent in the corresponding month of the
Recent developments at Lakshmi Vilas
CEO. previous year, according to the data.
Bank (LVB) and Dhanlaxmi Bank under-
score the importance of having one
more Executive Director on the board Bank credit up 5%, depos- Exim Bank extends $400m
who can handle the functions of the its clock 12% growth loan to Maldives
MD and CEO.
Bank credit grew 5.26 per cent to Rs. Export-Import Bank of India (EXIM
The day-to-day affairs of the afore- 102.24 trillion while deposits rose Bank), on behalf of the Government of
mentioned banks are now being 11.98 per cent to Rs. 142.48 trillion in India, has extended a soft loan of
handled by a three-member Commit- the fortnight ended September 11, $400m to the Maldives for the Greater
tee of Directors (CoD), following the according to the RBI data. Malé Connectivity Project.
shareholders rejecting the resolution
seeking the appointment of MD and In the fortnight ended September 13, The Greater Malé Connectivity Project
CEO. 2019, bank credit was at Rs. 97.13 tril- (GMCP) is aimed at establishing new
lion and deposits at Rs. 127.22 trillion. connections between Malé, the capi-
LVB shareholders had rejected the tal city of the Maldives, and three
resolution seeking the appointment of In the previous fortnight ended August neighbouring islands.
S Sundar as Managing Director and 28, 2020, bank credit had grown by
CEO (interim), with 60.6 per cent of 5.49 per cent to Rs. 102.11 trillion It is expected to improve the economic
the votes polled being against it at the while deposits were up 10.92 per cent activity between the four islands and
annual general meeting. to Rs. 141.76 trillion. create new employment opportunities
On a year-on-year (y-o-y) basis, non- in the region.
Similarly, DLB shareholders rejected
the resolution seeking the appoint- food bank credit grew at 6.7 per cent The agreement was signed by the
in July as against a growth of 11.4 per EXIM Bank general manager Nirmit
ment of Sunil Gurbaxani as MD and
cent in the same month of the last Ved and Government of Republic of
CEO, with 90.488 per cent of the votes
year, according to the data on sectoral Maldives Minister of Finance Ibrahim
polled being against it at the annual deployment of bank credit for July
general meeting. Ameer.
2020, released recently by the RBI.
Banking expert V Viswanathan opined With the latest agreement, EXIM Bank
that having an Executive Director in Growth in loans to industry slowed to has extended three Lines of Credit
addition to MD and CEO will ensure 0.8 per cent in July as compared with (LoC) worth a cumulative $1.2bn to the
that a bank's business and daily func- 6.1 per cent growth in July 2019, the Maldives.
tions are carried hindrance. data showed. In addition to the Greater Malé Con-
Advances to agriculture and allied ac- nectivity Project, the LoCs provided by
He emphasised that since independent
directors were not involved in opera- tivities registered a growth of 5.4 per EXIM Bank to the Maldives covered
tional matters earlier, they might take cent in the reporting month as com- various projects such as water and
more time to convey their decisions if pared with a growth of 6.8 per cent sewerage, Addu development, inter-
they have to exercise the powers of last year in the same period. national cricket stadium project, the
the MD and CEO. Credit to the services sector continued Gulhifalhu port project, Hanimaadhoo
to grow at a robust, albeit deceler- airport project and road construction
S Ravi, Practising Chartered Accoun- projects.
tant, observed that the RBI must give ated, rate of 10.1 per cent in July 2020
as against 15.2 per cent growth. EXIM Bank noted that with the latest
directions to all bank managements to
have at least an Executive Director Personal loans continued to perform LoC to the Maldives, it now has 266
who is a 'key managerial personnel' so well registering a growth of 11.2 per LoCs covering 62 countries in Africa,
that he/ she can step in to lead the cent as compared with 17 per cent Asia, Latin America and the CIS. T

8 | 2020 | OCTOBER | BANKING FINANCE