RBI cuts Yes Bank CEO Rana Kapoor's tenure; decision may worry other private lenders
Rana Kapoor, who co-founded the bank with Ashok Kapoor in 2004, established the private bank's credentials and led it to rise above expectations. Its shares have seen a 25-fold rise in the past 13 years and have generated compound annual growth return of around 28 per cent.
- Sep 20, 2018,
- Updated Sep 28, 2018 5:29 PM IST
Yes Bank will have a new CEO as early as next year as the RBI has asked the private lender that incumbent Rana Kapoor may remain at top post only till January 31, 2019. Rana Kapoor's term was given three-year extension by the bank shareholders in June, but the central bank had not specified the exact period of his tenure.
"Reserve Bank of India has vide letter dated September 17, 2018 received today, intimated that Shri Rana Kapoor may continue as the MD&CEO till 31 January 2019, and the Board of Directors of the Bank are scheduled to meet on September 25, 2018 to decide on the future course of action," Yes Bank said in a regulatory statement.
Earlier this year, the RBI had turned down the re-appointment of Axis Bank CEO Shikha Sharma for three years, despite the fact that it was endorsed by the bank's board. The CEO of another major private lender, ICICI Bank's Chanda Kochhar, is under probe in the Videocon loan case. According to experts, the latest move by the RBI will worry other private banks too. They'll fear the original promoters may be asked to either pare down their control or told to step aside from the top post.
Rana Kapoor, who co-founded the bank with Ashok Kapoor in 2004, established the private bank's credentials and led it to rise above expectations. Its shares have seen a 25-fold rise in the past 13 years and have generated compound annual growth return of around 28 per cent, data from Bloomberg shows. In the past 14 years of existence, Yes Bank's share has surged from Rs 12.5 in 2005 to Rs 318.50 apiece now. As a promoter, Kapoor and his family own a 10.66 per cent stake in the bank. He has been the bank's CEO since 2004.
The banking sector has seen increased regulatory scrutiny over the last two years as the RBI has tried to push for appropriate recognition of bad loans. Last month, the RBI rejected Kotak Mahindra Bank's use of preference share allotment route to reduce promoter Uday Kotak's shareholding from 30 per cent in the bank. As part of the RBI's guidelines for new bank licences released four years ago, the Kotak Bank promoters were asked to reduce their stake from 30 per cent to 20 per cent by December 2018, 15 per cent by 2020, and then 10 per cent.(Edited by Manoj Sharma)
Yes Bank will have a new CEO as early as next year as the RBI has asked the private lender that incumbent Rana Kapoor may remain at top post only till January 31, 2019. Rana Kapoor's term was given three-year extension by the bank shareholders in June, but the central bank had not specified the exact period of his tenure.
"Reserve Bank of India has vide letter dated September 17, 2018 received today, intimated that Shri Rana Kapoor may continue as the MD&CEO till 31 January 2019, and the Board of Directors of the Bank are scheduled to meet on September 25, 2018 to decide on the future course of action," Yes Bank said in a regulatory statement.
Earlier this year, the RBI had turned down the re-appointment of Axis Bank CEO Shikha Sharma for three years, despite the fact that it was endorsed by the bank's board. The CEO of another major private lender, ICICI Bank's Chanda Kochhar, is under probe in the Videocon loan case. According to experts, the latest move by the RBI will worry other private banks too. They'll fear the original promoters may be asked to either pare down their control or told to step aside from the top post.
Rana Kapoor, who co-founded the bank with Ashok Kapoor in 2004, established the private bank's credentials and led it to rise above expectations. Its shares have seen a 25-fold rise in the past 13 years and have generated compound annual growth return of around 28 per cent, data from Bloomberg shows. In the past 14 years of existence, Yes Bank's share has surged from Rs 12.5 in 2005 to Rs 318.50 apiece now. As a promoter, Kapoor and his family own a 10.66 per cent stake in the bank. He has been the bank's CEO since 2004.
The banking sector has seen increased regulatory scrutiny over the last two years as the RBI has tried to push for appropriate recognition of bad loans. Last month, the RBI rejected Kotak Mahindra Bank's use of preference share allotment route to reduce promoter Uday Kotak's shareholding from 30 per cent in the bank. As part of the RBI's guidelines for new bank licences released four years ago, the Kotak Bank promoters were asked to reduce their stake from 30 per cent to 20 per cent by December 2018, 15 per cent by 2020, and then 10 per cent.(Edited by Manoj Sharma)