RBI wants Yes Bank CEO Rana Kapoor’s successor by February 1

The Reserve Bank of India (RBI) has reaffirmed Yes Bank that the bank should appoint a successor to Chief Executive Officer Rana Kapoor by 1 February 2019. It was only in September when the Central Bank made it clear that Kapoor could continue till January 31 but gave no reason for that. On the contrary, Yes Bank’s shareholders agreed to extend Kapoor’s term for three more years.

Following the RBI’s declaration, the retail bank’s shares dipped by almost 30 percent. Looking for respite, the bank asked for the RBI’s approval to extend the Chief Executive Officer’s term for three years as that will help the bank find an appropriate successor. But the RBI flatly refused that and stuck to its deadline to find a new CEO.

The Indian Banks have witnessed a chunk of bad debts in recent times and this stern move by the central bank highlighted its strict vigil in handling problems relating to bad debts.

Kapoor has come a long way since 2004 when he co-founded the Yes Bank which went on to become the fifth largest private sector bank in India in terms of assets. He is seen as a charismatic business leader and the country’s one of the most prominent bankers.

However, the rapid expansion of Yes Bank was done and at the same time the bank’s bad loans rose which is seen as a big problem in the Indian banking sector. The retail bank has now resorted to advisory firm Korn Ferry to help find an appropriate successor for Kapoor.

According to statement from the bank after the closure of markets on Wednesday, it wants to finalise the hiring process by mid-December. For the record, the Yes Bank’s shares nosedived almost seven percent in Mumbai market and it closed 1.2 percent lower.

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