Can you explain the current situation with RBL Bank?

The concerns around RBL bank stem from a slew of rapid negative developments. The most prominent change was the stepping down of its MD & CEO, Vishawvir Ahuja. Furthermore, RBI’s move to appoint its Chief General Manager Yogesh K Dayal as an additional director on the board of RBL Bank is financially concerning in the view of experts and analysts. In an investors’ conference, Rajiv Ahuja announced that the former CEO was stepping down due to health concerns. However, with no clarity on his future role in the company, the situation is unconvincing for depositors and investors.

This comes after RBI rejected RBL bank’s request for another three-year term for Vishwavir Ahuja last year. Instead, it allowed a mere one-year extension. Since then, depositors and investors have been questioning the ability of Vishwavir Ahuja. Consequently, RBI’s step of appointing its own director (which, in the past, has always been done for financially struggling banks) signals that RBL bank may need to pay closer attention to its future operations.

Recently, billionaire Rakesh Jhunjhunwala and RK Damani have sought RBI’s approval to buy a 10% stake in RBL bank, which analysts feel may be a way to counter volatility and reassure depositories and investors. RBI, too, has assured depositors and investors that the bank is well capitalised, and its financial health remains stable. However, RBL Bank’s shares have dipped over 25% in the past few days. For now, it remains to be seen how this situation will turn out for the bank.