RBL Bank’s Vishawvir Ahuja has stepped down as MD & CEO of the bank, and the bank has appointed Rajeev Ahuja as the interim Managing Director and Chief Executive Officer of the bank with immediate effect. The Reserve Bank of India has also appointed its Chief General Manager Yogesh K Dayal as an additional director on the board of RBL Bank.
RBL Bank in a regulatory filing said that the board of the bank has accepted ”the request of Vishwavir Ahuja to proceed on leave with immediate effect”. The board in a meeting held on Saturday appointed Rajeev Ahuja (currently the Executive Director) as interim Managing Director & Chief Executive Officer of the bank with immediate effect, subject to the regulatory and other approvals, the bank said.
The other terms and conditions of his appointment, such as remuneration, would remain unchanged. The bank said it received a communication from the Reserve Bank on December 24, and appointed its Chief General Manager Yogesh K Dayal as an additional director on the board of RBL Bank for a period of two years, with effect from December 24, 2021 till December 23, 2023 or till further orders.
”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 bank said. The financials of the bank remain robust with a healthy capital adequacy of 16.3 percent, high levels of liquidity as reflected through Liquidity Coverage Ratio of 155 percent, stable net NPA of 2.14 percent, credit deposit ratio of 74.1 percent, and a leverage ratio of 10 percent, for the quarter ended September 30, 2021, it said.
In addition, the bank has also improved the granularity of its deposits and advances, RBL Bank said. Bank employee unions’ umbrella body AIBEA had written a letter to Finance Minister Nirmala Sitharaman expressing concern that everything was not right at RBL Bank and it was going the Yes Bank and Lakshmi Vilas Bank way.
”We are worried and concerned about the developments that are taking place in the affairs of RBL Bank Ltd, the Kolhapur-based private bank. ”The sequence of events leading to the sudden exit of Vishwavir Ahuja along with induction of Dayal from RBI on the board as an additional member indicates that everything is not ok with the bank,” AIBEA said in its letter to the Finance Minister.
Vishwavir had been heading the private sector bank for the last one decade. While the board recommended his continuation, it is learnt that RBI has agreed only for a short term up to 2022, AIBEA said further.
There are also reports that the bank has been overindulging in retail credit, micro-financing and credit cards and consequently has burnt its finger resulting in weakening the financials of the bank, it said. ”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,” AIBEA’s letter to Sitharaman urged.