The re-election of four directors of the Bangurs is being stoutly opposed by the Tayals who presently control the bank. The four directors retiring this month are: BP Singh, Vinay Mittal, Satyajit Mitra and V K Rungta. Currently, BoR has 15 directors on its board with the Tayals and the Bangurs having six directors each on the board.

According to bank sources, the Bangurs will lose their say in the bank if they are unable to get their nominees on to the bank's board. The outcome of at the AGM will also have a bearing on the rights issue which is critical for the bank's survival. Both the sides are collecting proxies from other shareholders to outmanoeuvre each other.

Reserve Bank sources said the Bangurs have been stalling every move in theBoR board which is not favourable to them. ``The RBI removed S N Bangur and Keshav Bangur from directorship in October 1997. However, the Bangurs have ensured to have a say in the bank through their nominees. The Bangur nominees on the board have tried every way to stall the rights issue,'' said a BoR official.

The RBI which inspected the books of BoR had detected several irregularities ranging from siphoning off of funds to not attending board meetings. The central bank later removed the Bangurs from the bank's directorship and also debarred them from holding directorship in any banking company for five years. The Tayals were later brought in to run the bank.

During the period when the Bangurs were at the helm, the bank's financial health continuously deteriorated with non-performing assets (NPAs) mounting to Rs 340 crore by the end of March 1998. The capital adequacy ratio has fallen to a dangerously low level of 0.83 per cent as on March 31, 1999 as against the mandatory norm of 8 per cent. The bankincurred a net loss of Rs 87.84 crore by the end of fiscal 1998. After the takeover of the bank by the Tayals, the loss has come down to Rs 67.46 crore for the year ended March 1999. BoR has now reported a net profit of Rs 1.88 crore in the first quarter ended June 30, 1999, on a total income of Rs 104.53 crore.

``The Tayals have launched the much-needed rights issue to increase the capital adequacy ratio as per the RBI norms. But court cases were filed repeatedly by some shareholders to stall the rights issue. Once the rights issue is floated, the Bangur stake will come down,'' said a BoR official.

``The RBI and the bank management have now paced emphasis on the NPA recovery. We're keen that in future NPAs are not created by placing stringent credit appraisal and effective monitoring systems,'' he said.