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    Rana Kapoor leaves YES Bank, Ajai Kumar interim CEO

    Synopsis

    YES Bank said it has got RBI’s approval for the appointment of the interim MD & CEO.

    PTI
    Mumbai: Rana Kapoor's reign as the managing director and chief executive of Yes Bank, which was co-founded by him, finally ended Thursday.

    The Reserve Bank had last September asked him to leave office by January 31 following which the board unsuccessfully sought an extension till September 2010.

    The midsized private sector lender Thursday appointed its non-executive director Ajai Kumar who had led state-run Syndicate Bank in the past, as his interim successor for a month till Ravneet Singh Gill from Deutsche Bank India takes over from March 1.

    The aggressive and temperamental Kapoor, who has had stints with foreign lenders earlier, had launched the bank along with his co-brother the late Ashok Kapur in the early years of the century.

    Kapur was killed in the 26/11 terror attack at the Trident Hotel and there was a bitter feud between Kapoor and Kapur's heirs which played out in the courts.

    The two warring groups of promoters who collectively own around 20 percent of the bank, however, reached a truce Tuesday by agreeing to appoint one non-independent director each on the board.

    But the feud with the co-promoter and the RBI action on him had the bank stock, which was one of the premium buy for long, getting whacked since last September, having lost more than two-thirds of its value since then.

    Even on a day the benchmark Sensex rallied close to 2 percent, Yes Bank stock was one of the few to lose, shedding 2.6 percent to Rs 194.30 on the BSE, down almost 55 percent from its 52-week high of Rs 404.

    Kapoor is credited with building the bank by deftly deploying wads of money in sponsorships and advertisements which served the bank well in getting marquee investors to buy into the bank, along with modern banking practices.

    Though the RBI offered no official reasons for shortening his term, it has been attributed to the regulatory audit finding out that the bank under-reporting NPAs by a cumulative Rs 10,000 crore for two consecutive years.

    According to sources, the RBI had cited "serious lapses" in governance and a "poor compliance culture" at Yes Bank as reasons for its "regulatory discomfort" in allowing Kapoor to continue to head the lender.

    The bank has displayed "highly irregular" credit management practices, the regulator had said.

    Sources citing the RBI letter said the regulator also wrote about its "concern" relating to a steep hike in Kapoor's remuneration by the board while seeking a three-year reappointment, saying it was in defiance of its earlier direction to trim CEO bonuses if asset quality was not good.

    The central bank said these happenings reinforce its "grave concerns and regulatory discomfort with the role of Kapoor in the governance, management and superintendence of Yes Bank."

    The incoming CEO Gill currently heads the German lender Deutsche Bank India. According to an earlier statement by Yes Bank, he will take charge on or before March 1.

    In a statement, the bank said Kumar had been a senior strategic advisor since 2014 and has been serving on the board since 2016.

    Kapoor leaves the bank as the fifth largest private sector in about 15 years of its life with loan book of Rs 2.43 lakh crore and a deposit base of Rs 2.22 lakh crore as of December 2018.



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    (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2024 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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