RBL Bank Crashes After RBI Appoints Additional Director, MD Goes On Medical Leave

Shares of RBL Bank came under free fall on Monday as investors' sentiment got a hit after corporate governance issues surfaced at private sector lender. The RBL Bank shares dropped as much as 20 per cent to hit fresh 52-week low of Rs 138 after its managing director and CEO Vishwavir Ahuja went on a sudden medical leave following Reserve Bank of India's appointment of Yogesh Dayal as an additional director on the bank's board. Meanwhile, the bank has appointed Rajeev Ahuja (existing executive director of the Bank) as the interim managing director and CEO of the bank.

Abrupt changes in the top management of companies make investors skeptical about the company's management and investors and traders resort to selling shares, analysts said.

Meanwhile, RBL Bank's interim chief executive and managing director Rajeev Ahuja on Sunday sought to allay concerns around the health of the private sector lender, stressing that the events over the weekend are not linked to quality of advances or asset quality.

He said the bank will stick to all the targets spelled out at the earning call in September, but conceded that microfinance lending is an area which requires more attention.

Vishwavir was central to the transformation exercise at the bank by a team and the new leadership will carry forward on the same agenda, Rajeev said.

Asked about the RBI action, which has a few precedents, Rajeev said the central bank would have its own specific reasons to make such an appointment, but declined to share any details.

To a question on what he feels will be the focus areas for RBI, Rajeev pointed to compliance and risk management as the possible priorities but was quick to add that these are the same as the bank's own internal interests as well.

RBL Bank, which had seen a pressure on deposits after the RBI action on Yes Bank in 2020, has excess liquidity of over Rs 15,000 crore and also many lines of liquidity, Rajeev said, adding that it is taking measures to reach out to customers.

The last 24 hours since the spate of announcements have not seen any major withdrawals, he said, stressing that the case of Yes Bank was different.

As of 10:12 am, RBL Bank shares crashed 10 per cent to hit fresh 52-week low of Rs 138, underperforming the Sensex which was down 0.13 per cent.