PremiumRBI said it had intervened under a rule that’s invoked ‘as and when it is felt that the board needs closer support in regulatory/supervisory matters.’ While this statement was welcome, bank customers and investors were still clueless about what the actual matter was
| Listen to this article |
On Monday, shares of RBL Bank crashed on news of Reserve Bank of India (RBI) action and management turbulence. Over the weekend, the lender disclosed that the regulator had appointed Yogesh Dayal, an RBI executive, as an additional director on its board, which had approved chief executive Vishwavir Ahuja’s request for leave, with his role assigned right away to executive director Rajeev Ahuja, appointed interim chief. To allay worries over its stability, RBL added that these changes were not “on account of any concern on advances, asset quality and deposits level of the Bank."
Speculation ran rife, of course, to quell which RBI stated on Monday that RBL was stable. By RBL’s last audited accounts, it had adequate capital for its risk-bearing assets, a provision coverage ratio of 76.6%, and could cover its liquidity needs. RBI said it had intervened under a rule that’s invoked “as and when it is felt that the board needs closer support in regulatory/supervisory matters." While this statement was welcome, bank customers and investors were still clueless about what the actual matter was. We need a detailed disclosure. Word on how serious RBL’s challenge is may help calm market nerves
Never miss a story! Stay connected and informed with Mint. Download our App Now!!