Yes Bank Names Ravneet Gill As CEO

Private sector lender Yes Bank Ltd. has named Ravneet Gill as its next chief executive officer. Gill, currently the head of Deutsche Bank in India, will take charge from founder CEO Rana Kapoor, who will step down at the end of January after the Reserve Bank of India denied him another full term.

“The Bank has received RBI approval for its new Managing Director and CEO, Mr. Ravneet Singh Gill for him to join on or before March 1, 2019....The Board will convene on January 29, 2019 to finalise the interim transition,” said the bank as part of a press release issued to announce the lender’s third quarter earnings.

A decision on a new CEO lifts an overhang for investors of Yes Bank. With Kapoor set to exit next week, the lack of clarity over the bank’s top leadership had weighed on the stock. Concerns over whether an insider would be appointed to take over from Kapoor had also bothered investors. Gill’s appointment will ensure a clean-slate for the bank.

Shares of Yes Bank surged following the announcement.

Exit Rana Kapoor; Enter Ravneet Gill

Kapoor’s exit comes amidst a clean-up in the Indian banking sector. In the past year, three private lenders have seen changes in top leadership. Shikha Sharma, former CEO of Axis Bank, exited after she too was denied an extension. Chanda Kochhar left ICICI Bank following allegations of quid pro quo in loans given to the Videocon Group.

In Yes Bank’s case, the bank’s leadership came into question after the regulator pointed out discrepancies in the way the bank reported its bad loan numbers.

Following an RBI audit, Yes Bank reported a large divergence of Rs 4,176 crore in its gross NPAs for the year ended March 2016. In the following financial year, the regulator conducted another audit of bank books, which led to Yes Bank reporting another large divergence. During the financial year ended March 2017, the bank’s divergence stood higher at Rs 6,355 crore.

As the bank moved to adjust for these divergences, bad loan ratios moved higher but remained below peers. For the quarter ended December 2018, the bank reported a gross non performing assets ratio of 2.1 percent compared to 1.7 percent last year.

Some of these concerns may have prompted the RBI to reject Kapoor’s application for another three year term at the helm of the bank he co-founded.

Gill’s entry into Yes Bank will represent a fresh start for the lender. A seasoned corporate banker, Gill has been the CEO of Deutsche Bank in India since 2012. He has been at the bank since 1991.

Ravneet Gill brings a lot of credibility and expertise to the role, said independent market expert Ajay Bagga.