RBL Bank: Investor aviary over CEO exit, RBI move

RBL Bank: Investor aviary over CEO exit, RBI move

Shares of the private sector lender RBL Bank tanked 20% in early trade today as investors pressed sell button following the sudden exit of long serving CEO, Vishwavir Ahuja.
Future, the Reserve Bank of India (RBI) appointing its chief general manager Yogesh K Dayal as an additional director on the RBL board, for a period of two years with immediate effect, stoked fears about the lenders financial strength.

The appointment of an RBI nominee on a private sector bank board is done by the regulator to protect depositors.
The banking regulator, on Christmas Day has sent its nominee to the bank’s board in an effort to strengthen RBL’s finance and asset quality.
Investors seems to be unsure of the private sector lender new CEO, Rajeev Ahuja’s fundraisings ability as well as retaining existing customers.

Meanwhile, RBL is sitting on Rs 15,000 crore of excess liquidity which will be more than enough to deal with any possible fear around sudden deposit outflows.
Apparently, the lender seems to be adequately capitalised and may not require to raise funds for the next 8-12 months.
Earlier this year, RBL had sought RBI’s approval to re-appoint Vishwavir Ahuja as CEO for another three-year term. The regulator, however, allowed the lender to extend his term by one year starting from June 30, 2021.

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