Private sector lender RBL Bank’s new interim MD and CEO Rajeev Ahuja on Sunday claimed that the financial institution and its administration have the total help of the Reserve Bank of India (RBI) after the RBI appointed its nominee on the board and long-term MD and CEO Vishwavir Ahuja proceeded on go away six months forward of the top of his tenure.
The exit of the financial institution’s MD got here after the RBI on Friday appointed Yogesh Okay Dayal, Chief General Manager, RBI, as an Additional Director on the board of the financial institution for a interval of two years until December 23, 2023 or until additional orders, whichever is earlier. The board appointed Rajeev Ahuja, at the moment the Executive Director, as interim MD & CEO of the financial institution with speedy impact.
“I can assure you the bank and its management have the full support of the RBI. I was the successor that the board chose yesterday, and the RBI nominee approved it,” Rajeev Ahuja stated in a convention name on Sunday. “These developments are not on account of any concern on advances, asset quality and deposits level of the bank. We want to allay any concerns any of you may have in this regard. The bank has the full support of the RBI,” he stated.
“The board has elevated an existing member of the management team to the interim MD & CEO role which should allay concerns on the strategy and smooth functioning of the bank as well as the strength of the overall franchise. The management team of the bank is also fully committed with Rajeev Ahuja to take the Bank forward,” the financial institution stated in a press release.
“I do not want to pre-empt why Vishwavir Ahuja proceeded on leave six months before his term ends,” the brand new CEO stated. On Saturday, the board accepted the request of Vishwavir Ahuja to go on go away.
Bank unions expressed concern over the developments in RBL Bank (earlier referred to as Ratnakar Bank). “In the background of the problems encountered by private Banks like Yes Bank and Lakshmi Vilas Bank last year, we urge upon you to immediately intervene in the matter in the interest of the depositors of this private sector bank and consider necessary steps including merger of this bank with a public sector bank,” CH Venkatachalam, General Secretary, All India Bank Employees Association (AIBEA) stated in a letter to the Finance Ministry.
Earlier this 12 months, RBL had sought approval from the RBI to nominate Ahuja for an additional three-year time period on the financial institution’s helm. The regulator, nevertheless, had allowed RBL to increase his time period by one 12 months beginning June 30, 2021.
Yes Bank and Lakshmi Vilas Bank had been earlier bailed out after they acquired into monetary and governance issues. Normally, the RBI appoints its nominee on the board of a personal financial institution when it notices points on the monetary or governance entrance.
“The sequence of events leading to the sudden exit of Vishwavir Ahuja along with the induction of Dayal from the RBI as an additional member indicates that everything is not ok with the Bank,” Venkatachalam stated. While the working revenue of the financial institution has been growing within the current years, the majority of those earned earnings have been adjusted in direction of provision for unhealthy loans and with the consequence the web revenue has remained very meagre, he stated.
The financial institution had a deposit base of Rs 75,588 crore within the quarter ended September 2021 and advances of Rs 58,046 crore. The financial institution’s gross non-performing property rose to Rs 3,130.93 crore or 5.4 per cent of gross advances as on September 30, 2021 from 3.34 per cent a 12 months in the past
However, the financial institution claimed every little thing is alright. “We wish to mention that the Bank is well placed to execute its business plan and strategy as communicated during our earnings call dated October 28, 2021. The business and financial trajectory continues to be on improving trend, post absorbing the challenges due to Covid 2 pandemic,” the financial institution stated in a submitting.
RBL Bank stated the financials of the financial institution stay strong with wholesome capital adequacy of 16.3%, excessive ranges of liquidity as mirrored via liquidity protection ratio of 155 %, secure web NPA of two.14%, credit score deposit ratio of seven 4.1 % and leverage ratio of 10.0%, for the quarter ended September 30, 2021. “In addition, the bank has also improved the granularity of its deposits and advances,” it stated.
The financial institution’s web revenue fell to Rs 31 crore within the quarter ended September 2021 from Rs 144 crore a 12 months in the past largely on account of a 5 per cent shrinkage in retail loans and in addition hit by a reversal in curiosity revenue from segments like microfinance. The RBI had imposed a wonderful of Rs 2 crore on RBL Bank for flouting board composition norms and guidelines associated to the opening of financial institution accounts earlier this 12 months.
Vishwavir Ahuja joined RBL Bank in July 2010. Prior to becoming a member of RBL Bank, he was the Managing Director & CEO of Bank of America, India from 2001 to 2009. Rajeev Ahuja has over 30 years of expertise within the monetary companies business., ,
