- GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development
- GS-3: Monetary Policy
Context: On October 20, Kerala-based Dhanlaxmi Bank informed the stock exchanges that some shareholders have requested to hold an Extra-ordinary General Meeting (EGM) with two key items on agenda.
- First, to curb the powers of CEO as a section of shareholders are unhappy with his performace. Once the powers to use capital is suspended, the CEO of a bank is an inconsequential role.
- In other words, the indirect message for the bank chief is to quit the position. But, in this case, the CEO—Shivan JK, a former State Bank officer—is unlikely to quit.
- This situation opens up room for an open confrontation between a section of influential shareholders and the top executive at the bank. That doesn’t augur well for the well-running of the bank.
- Second, to empower one of the key shareholders to negotiate a settlement with some warring former directors.
Main Practice Question: What are Basel Norms and why is it important for the banking system?
Note: Write answer his question in the comment section.