Although neither the regulator nor the private lender has given any indication as to the reasons for the changes, this is seen as a major event by the banks as RBI had only accepted a one-year term for the CEO of Ahuja Bank in June 2021. Ahuja is 62 years old. and in terms of age, he has leeway to continue until he is 70 years old.
Veteran banker Ahuja, who was CEO of Bank of America in India for eight years until 2008, led the transformation of the 100-year-old Ratnakar Bank, attracting new investors and new leadership. The private lender was renamed and repositioned as a next generation bank that was listed following an IPO in 2016. Ahuja had a 3% stake before the IPO, which fell to 1 % after capital dilution and sale of shares. More recently, the bank has partnered with fintechs and offers Banking as a Service (BaaS).
Dayal, who has been appointed director for a two-year term, is the chief managing director at the Reserve Bank of India in charge of the communications department. Previously, he worked in the Department of Monetary Policy and the Department of Banking Supervision.
This is not the first time that RBI has exercised its right to appoint an additional director to the board of directors of the private bank. In the past, RBI had appointed a director to the boards of Yes Bank, Ujjivan Small Finance Bank and Dhanlaxmi Bank. RBL Bank shares fell 3% on Friday.
In December 2020, RBL raised funds of Rs 1,556 crore through a preferential allocation. However, the quarter ended in September saw the bank’s net profit drop 93% to Rs 9.7 crore. The bank’s profits fell after a 33% increase in provisions. This was after a loss of Rs 459 crore in the first quarter of FY22.
Reassuring investors of the bank’s strength, RBL said the bank’s business and financial trajectory continues to be on an improving trend, having absorbed the challenges of the Covid 2 pandemic.
“The Bank’s financial data remains strong with a healthy capital adequacy of 16.3%, high levels of liquidity as evidenced by the liquidity coverage ratio of 155%, a stable net NPA of 2.14%, a credit deposit ratio of 7.1% and a leverage ratio of 10.0% for the quarter ended September 30, 202, ”the bank said in a press release.