The leadership crisis at the mid-tier private sector lender Karnataka Bank has resolved with the bank appointing Raghavendra Srinivas Bhat as the interim managing director & chief executive effective July 16 for three months or until a regular managing director & chief executive is appointed.
He has also been made an additional director on the board of the bank, the bank informed the exchanges on Monday.
Raghavendra Srinivas Bhat will also be designated as a key managerial personnel of the bank starting July 16. The bank has confirmed that Bhat is not debarred from holding the office of a director by any order passed by Sebi or any other authority. The statement also said, he is not related to any of the other directors of the lender.
Bhat has spent 38 years at Karnataka Bank starting as a clerk in 1981 and went onto become as the chief operating officer in 2019 and was appointed COO again from July 1, this year after the resignation of the former MD Srikrishnan Hari Hara Sarma, who stepped down citing personal reasons earlier on June 29. Along with his an executive director Sekhar Rao also quit. Sarma’s term ends July 15.
In May, the bank's auditors had flagged certain expenditure incurred by the whole-time directors without taking the board into confidence.
Executive director Sekhar Rao also quit citing his inability to relocate to Mangaluru and other personal reasons. His resignation has been accepted by the board and will be effective from July 31.
The bank has formed a search committee to identify suitable candidates for the positions of CEO and executive director.