Newly-appointed managing director and CEO of Karnataka Bank Raghavendra S. Bhat on Wednesday said the fundamentals of the bank have been very strong, assuring customers and investors that there was no need of worry.

He was speaking to reporters after assuming charge following the resignation of Srikrishnan Hari Hara Sarma as MD and CEO with effect from July 15.

Mr. Bhat, who was appointed by the board of directors on July 14 for three months or till the shareholders clear the appointment in the ensuing annual general meeting, said he would continue to work upholding the century-old legacy of the bank.

In an attempt to dispel rumours in sections of the media and social media that the bank’s financials were not good following the sudden exit of Mr. Sarma and resignationist of executive director Sekhar Rao with effect from July 31, Mr. Bhat said customers and investors need not worry about the bank’s health.

Mr. Bhat said the bank was well capitalised to meet the future growth requirements and has more capital than the statutory requirement. As on March 31, the bank’s capital adequacy ratio was 19.85% as against the statutory requirement of 11.5%, he noted. The bank has been declaring a net profit from its inception and maintained a track record of declaring dividends.

Asked whether the board’s ‘experiment’ to appoint ‘outsiders’ to lead the bank that traditionally had homegrown leaders did not work, Mr. Bhat said change was a regular process. Mr. Sarma had held key positions in HDFC and Jio Payment Banks before joining Karnataka Bank.

He also spiked rumours about the bank’s merger with other banks and said it had no single promoter; about 65% of the stake was with individual investors. There was also no proposal to shift the bank headquarters to Bengaluru as rumoured.

Joined as a clerk

Mr. Bhat joined the bank as a clerk in 1981 and rose to the position of chief operating officer before retiring in 2019. He said the bank, popularly known as KSN Adiga’s Bank, was founded to support agriculture, MSMEs and other underserved sectors, which it continues to do. He sought cooperation from the employees, customers and investors to take forward the bank’s legacy.