RBI extends Rajiv Ahuja term as RBL bank MD & CEO for 3 more months

What is the news :

The Reserve Bank of India (RBI) approved the extension of the term of Rajeev Ahuja, interim Managing Director & CEO of RBL Bank for a further period of three more months with effect from March 25, 2022, or till the appointment of a regular MD & CEO, whichever is earlier.
Rajeev Ahuja was appointed as the interim MD & CEO of the bank on December 25 after the abrupt exit of the former chief of the bank Vishwavir Ahuja. Further, the RBI had appointed an additional director on the Board of the bank in an unusual move.
In his first press conference post-appointment as interim MD & CEO of the bank, Rajeev Ahuja tried to allay fears over the bank’s asset quality and liquidity position. He said that the bank was sitting on a cash surplus of Rs 15,000 crore and stressed that the asset quality has improved over quarters and now looks stable. The bank was in the process of rebalancing the loan book and cutting down the risky unsecured lending book.
However, as rumours spread around the bank’s financial health, the RBI issued a statement on December 27 saying there was no need for depositors and other stakeholders to react to the speculative reports as the bank’s financial health remains stable.

“The Reserve Bank stated that RBL bank is well capitalised and the financial position of the bank remains satisfactory. As per half-yearly audited results as of September 30, 2021, the bank has maintained a comfortable Capital Adequacy Ratio of 16.33 percent and Provision Coverage Ratio of 76.6 percent.
The Liquidity Coverage Ratio (LCR) of the bank is 153 percent as on December 24, 2021, as against the regulatory requirement of 100 percent.

Why former chief of the bank Vishwavir Ahuja stepped down:

There was, however, uncertainty over his tenure as the Reserve Bank of India (RBI) had earlier approved his reappointment as CEO for a period of only one year, instead of the three-year term sought by the bank.
The bank was under the radar for higher non-performing assets (NPAs) as some of its bets in the corporate loans segment impacted its performance in the post-2018-19 period.
For instance, the net profit crashed from Rs 867 crore in 2018-19 to Rs 508 crore in 2020-21. In the same period, the return on assets fell from 1.27 per cent to 0.54 per cent. The growth in loan book also stagnated from Rs 54,308 crore in 2018-19 to Rs 58,623 crore in 2020-21.
The bank’s share price also fell sharply from close to Rs 700-levels in June-July 2019 to around Rs 172 per share as of Friday. In the last three years, the bank has eroded shareholders’ wealth in a big way.
The market was earlier giving RBL Bank a higher price to book value because of high growth in loans and profits year after year. But as growth stagnated post-2018-19, the stock became untouchable in the market.
The uncertainty over the tenure of Vishwavir Ahuja also impacted its stock performance. In the past, many private sector bank CEOs like Chanda Kochhar (ICICI Bank), Shikha Sharma (Axis Bank) and Rana Kapoor (Yes Bank) had faced questions from RBI on their performance.

Rise in profit :

During the quarter ended December, RBL Bank’s net profit rose five fold to Rs 156 crore. The lender’s total deposits, however, fell 3% sequentially to Rs 73,639 crore.
Further, as of December 31, RBL Bank’s gross non-performing asset (GNPA) ratio stood at 4.84% as against 5.40% the previous quarter, while the net NPA ratio improved to 1.85% from 2.14%.

About RBL bank :

Recent news :

RBL Bank Flags off 8 th edition of ‘UMEED 1000’ Cyclothon in support of Inclusive Education

RBL Bank, one of India’s leading private sector banks, on 1 dec 2021 flagged off the 8 th edition of its flagship CSR initiative UMEED 1000 Cyclothon, to raise funds for Inclusive Education.
159 cyclists, including 59 RBL Bank employees, will cycle 1000 kms each to support Inclusive Education. The Bank also aims to ensure that education is accessible to everyone, through its digital education initiative in association with the National Institute of Open Schooling (NIOS).
This initiative comes close on the heels of its precursor, a 100kms Cyclothon, that was held in Bhubaneswar last month which was a step forward in the Bank’s inclusive agenda. It saw participation from 70 cyclists which included Senior Bureaucrats, along with RBL Bank employees and cyclists from the Indian Armed Forces. The Bank also hosted the ‘Swarnim Vijay Mashaal’ at the event, led by the Indian army.

RBL Bank Accredited as Agency Bank to the Reserve Bank of India Mumbai, August 11, 2021:

RBL Bank announced that it has been empanelled by the Reserve Bank of India (RBI) as an ‘Agency Bank’ to conduct banking business for the Central and State Governments.
The authorisation will enable RBL Bank, to handle a broad range of transactions related to government business, such as distributing Subsidies, Pension payments, collecting Central and State taxes including Income Tax, Excise Duties, Customs, GST, Stamp Duty, Registration, State Excise (VAT) and professional tax, in both online and offline modes.

About RBI:

The Reserve Bank of India(RBI) is India’s central bank and regulatory body and is responsible for the issue and supply of the Indian rupee and the regulation of the Indian banking system.
It also manages the country’s main payment systems and works to promote its economic development.
Established : 1 April 1935
Governor: Shaktikanta Das
Deputy governors (4): Rabi Sankar, M. Rajeshwar Rao, Dr. M. D. Patra, M. K. Jain

3 years ago