Dhanlaxmi Bank cuts salary by 40 percent; denies sell-off rumours

Dhanlaxmi Bank, which has been in trouble for past several months, has now announced a 40 percent salary cut across various worker categories. The total employee strength has also come down from 4,600 to 4,200. The management has confirmed that 300 workers have resigned since November 2011.

The bank has however denied any possibility of selling off the bank and will now raise Rs 200 crore of Tier I capital by the end of June.

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The bank, which has 275 branches across 14 states, was thinking of shutting down 30 branches and appoint a new deputy CEO, Economic Times reported recently. Soon after, the chief operating officer, Muralidaran Rajamani was elevated to the position of the deputy CEO.

The bank today, however, clarified it will not shut down all its branches outside Kerala. The company of course, needs to rationalise its costs but all capabilities released in the last three years will be retained. The lender also plans to surrender excess real estate in metros and major cities, it said in a statement.

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ET also reported this morning that PG Jayakumar, the bank's new managing director and chief executive officer, is looking at major cost cutting and will also focus on high profitability businesses like gold loans. Jayakumar says the idea is to cut operating expenses by 50 percent for the year ending March 2013 from the previous year's levels.