There has been a lot of activity in the bank in the last few days. On the one hand, RBI appointed an additional director on the bank’s board of directors. While the Managing Director and Chief Executive Officer (CEO) of the bank Vishwavir Ahuja was sent on leave.
Rajiv Ahuja, the newly appointed head of RBL Bank, said the financial position of the institution is sound and the sudden change at the apex level is not a cause for concern.
Amid concerns being raised by various quarters, the central bank on Monday said, “Depositors and concerned parties need not react to speculation reports. It said the financial position of the bank is ‘stable’.
Meanwhile, RBL Bank shares closed at Rs 140.90, down 18 per cent on the BSE. During trading, it had come down to a 52-week low of Rs 132.32.
“The bank (RBL) has adequate capital and financial position is satisfactory,” the central bank said. As per the half yearly accounting results, the capital adequacy ratio of the bank as on September 30, 2021 is 16.33 per cent which is satisfactory and provision coverage ratio is 76.6 per cent.
RBI clarified, “Additional directors in private banks are appointed under section 36AB of the Banking Regulation Act, 1949. This is when it is felt that the Board needs support in regulatory/supervisory matters.
Vishwavir Ahuja announced his resignation as chief executive officer after RBI chief general manager Yogesh K Dayal was appointed as additional director of RBL Bank. Thereafter, the board of directors of the bank has entrusted the responsibility of managing director and CEO to Rajiv Ahuja on an interim basis.
Dayal has been appointed from December 24 to December 23, 2023 or till further orders, whichever is earlier.
Ahuja had said on Sunday that the financial position of the bank was sound and it had the full support of the RBI and the board of directors.
RBL Bank reported a net profit of Rs 31 crore for the second quarter ended September, 2021 from Rs 144 crore in the same quarter a year ago.
AIBEA (All India Bank Employees Association) wrote a letter to Finance Minister Nirmala Sitharaman on 25 December saying that the bank has given a lot of credit in the credit card business, retail loan and small amount. This has worsened his financial condition.
Anticipating that RBL Bank may go the way of Yes Bank and Lakshmi Vilas Bank, the organization had urged the government to intervene immediately and consider merger of the bank with the public sector bank.