Private sector lender YES Bank will have to start looking for a new chief with the Reserve Bank of India conveying that the term of Managing Director and CEO Rana Kapoor will come to an end on January 31, 2019.
“Reserve Bank of India …intimated that Rana Kapoor may continue as the MD and CEO till January 31, 2019,” YES Bank said in a regulatory filing on Wednesday, adding that the board of directors of the bank will meet on September 25 to decide on the future course of action.
This will give the bank a little more than four months to appoint a successor to Kapoor.
In what was seen as a last-minute clearance, the RBI had, on August 30, given approval “till further notice” for Kapoor’s re-appointment as YES Bank’s MD and CEO. This was in contrast to the proposal by the lender’s shareholders for a three-year term for Kapoor from September 1.
Since then, there had been wide speculation that Kapoor, who has been heading the bank since 2004, may have to step down.
Sources said the RBI has been concerned about regulatory issues at the bank as well as the long tenure of Kapoor. Before giving its approval, the RBI is understood to have been in touch with YES Bank over the terms of Kapoor’s re-appointment as well as loans to certain borrowers.
Divergences in YES Bank’s bad loans have been an issue, although the lender has been performing well in the past quarters. In 2016-17, YES Bank reported gross NPAs of ₹2,018 crore, while the RBI had estimated it ₹8,373.8 crore.
Scrip of YES Bank fell 1.44 per cent and closed at ₹318.50 a piece on the Bombay Stock Exchange on Wednesday.