RANA Kapoor’s Tenure Extended Up To Jan 2019 By RBI

MUMBAI headquartered Yes Bank has disclosed that its chief executive and managing director Rana Kapoor , one of the founders  of the  bank in 2004,has been asked to step down after his extended till  January 2019. The bank said on Wednesday in a regulatory filing. In June this year, Yes Bank’s shareholders had approved the re-appointment of Rana Kapoor as the chief executive and managing director for three years, subject to final approval from the Reserve Bank of India. His present term ended on August 31. However, the RBI had allowed him to continue till further notice..The Reserve Bank of India   has officially intimated   Yes Bank ending  speculation  on the 61  years old high profile  banker and  rejecting the lender’s request to extend his tenure by three years. Yes Bank’s board will meet on September 25 to decide on future action, the bank added; the bank said without giving details in a statement. The  marching order given to Kapoor  illustrates how far the RBI is preparing to go to root out a system-wide legacy of shoddy lending that’s resulted in ballooning bad debts. While the central bank didn’t give a reason for its decision, it had tussled with Yes Bank about how much of its loans should be recognized as nonperforming, comments Kotak Mahindra owned The Business Standard.The RBI has also taken a tough line with other private-sector bank CEOs in recent months. Despite support from shareholders, Axis Bank Ltd.’s head Shikha Sharma in April said she will step down at the end of 2018, more than two years before the proposed end of her term, after the central bank refused to extend her tenure.“The RBI is snuffing out any hope bankers had about non-compliance being dealt with gently,” said Soumen Chatterjee, head of research at Guinness Securities Ltd. “Senior management now knows that anyone not playing by the central bank’s rule book will be shown the door, ”said  The  Business Standard.Both Axis and Yes Bank have stood out from their peers in the wake of the RBI’s stricter disclosure standards for bad loans introduced in April 2017. The regulator is seeking to clean up an overhang of more than $210 billion of stressed assets in the banking system, one of the highest in the world, and thereby revive lending growth in Asia’s third-largest economy. The Central banker last year ordered lenders to come clean in exchange filings if the difference between the soured credit reported in their results and as assessed in subsequent central bank reviews amounted to more than 15 per cent.Yes Bank later reported  discrepancy of more than 300 per cent, one of the highest in the industry, the difference for Axis was 26 per cent. Yes Bank has argued that the impact of the divergence on the bank’s results was small because it subsequently recovered many of the loans labelled as problematic by the central bank.RBI also rebuffed the method of India’s richest banker, Uday Kotak, to pare his stake in Kotak Mahindra Bank Ltd to meet regulatory requirements. Kotak’s attempt to comply with a year-end deadline to cut his holding by one-third to 20 per cent didn’t get approval from the central bank, the lender said in an exchange filing in August, reports media . Meanwhile, In Dalal Street, Yes Bank’s are trading in the red(pic courtesy “ Livemint)

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