RBI checks into RBL Bank board; CEO goes on leave

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MUMBAI: RBL Bank on Saturday saw a series of changes at the top management level starting with the Reserve Bank of India’s appointment of Yogesh K Dayal as an additional director. The bank’s board also accepted the request of the MD & CEO Vishwavir Ahuja to proceed on leave with immediate effect. Separately, the board approved the appointment of Rajeev Ahuja, executive director, as interim managing director & CEO with immediate effect.
Although neither the regulator nor the private lender have given any indication of the reasons for the changes, this is seen as a major event by banks as RBI had accepted only a one-year term for the bank’s CEO Ahuja in June 2021. Ahuja is 62 and in terms of age has headroom to continue until he is 70.
Veteran banker Ahuja, who was CEO of Bank of America in India for eight years until 2008, led the transformation of the 100-year old Ratnakar Bank by bringing in new investors and new management. The private lender was renamed and repositioned as a new generation bank which was listed following an IPO in 2016. Ahuja had a 3% stake before the IPO which has come down to 1% after equity dilution and sale of shares. More recently the bank has been partnering fintechs and offering Banking as a Service (BaaS).
Dayal, who has been appointed director for a term of two years, is a chief general manager at the Reserve Bank of India in charge of the Department of Communication. He was earlier with Monetary Policy Department and the Department of Banking Supervision.
This is not the first time RBI is exercising its right to appoint an additional director on the board of the private bank. In the past RBI had appointed a director on boards of Yes Bank, Ujjivan Small Finance Bank and Dhanlaxmi Bank. Shares of RBL Bank had fallen 3% on Friday.
In December 2020, RBL completed a Rs 1,556 crore fund raising through a preferential allotment. However, the quarter ended September saw the bank’s net profit decline 93% to Rs 9.7 crore. Profits of the bank fell after a 33% rise in provisions. This was after a Rs 459 crore loss in the first quarter of FY22.
Assuaging investors of the soundness of the bank, RBL said that the bank’s business and financial trajectory continues to be on an improving trend, post absorbing the challenges due to Covid 2 pandemic.
“The financials of the Bank remain robust with a healthy capital adequacy of 16.3%, high levels of liquidity as reflected through Liquidity Coverage Ratio of 155 %, stable Net NPA of 2.14%, Credit Deposit Ratio of 7 4.1 % and a leverage ratio of 10.0%, for the quarter ended September 30, 202” the bank said in a statement to the exchanges.

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