RBI denies YES Bank request to extend MD & CEO Rana Kapoor’s term

RBI denies YES Bank request to extend MD & CEO Rana Kapoor’s term
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New Delhi, Oct 18: The Reserve Bank of India (RBI) has once again rejected YES Bank’s request for extending the term of MD & CEO Rana Kapoor, and reaffirmed the February deadline for finding his successor.
The RBI said that a successor to Kapoor should be appointed by February 1, 2019. Kapoor’s tenure was cut short by an order issued by the RBI recently. Kapoor will be in office till January 31, 2019.
Meanwhile, the bank’s stock closed at Rs 231.75 on BSE, down by 6.85 per cent from the previous close.
It was earlier reported that the bank plans to submit MD & CEO candidates by December 15. “The bank’s appointed committee is targeting to complete this recruitment process latest by mid-December 2018,” confirmed the bank’s filing on Wednesday.
The bank has hired US-based advisory firm Korn Ferry to help with the selection process. A committee has been set up with three internal and two external members to search for suitable candidates. Korn Ferry will assist the committee in making recommendations to the board within the stipulated timeline, said the bank.
“A number of candidates will be considered from outside the organisation. From inside, one of the likely contenders is Rajat Monga,” a source had said. Monga is senior group president at YES Bank.
The possibility of an external candidate being chosen as Kapoor’s successor is quite high, another source pointed out. RBI would have the final say, he added.
“The bank will have to send a minimum of three names for the position to RBI for approval,” Monga had told analysts earlier this month.
Also, the options sent to the regulator would be a combination of internal and external candidates, he had said.
Earlier this month, Monga had said it was still not decided whether Kapoor would continue on the board of directors or not. A source said the board was yet to discuss this; the long legal battle between the promoters had to be sorted first and negotiations for doing so were on between the promoters.
Kapoor and his late brother-in-law, Ashok Kapur, along with Rabo Bank, had floated YES Bank in 2004. Ashok Kapur died in 2008. Rana Kapoor and his family together owned 10.64 per cent of the bank’s equity, as of last month. Ashok Kapur’s wife, Madhu Kapur, owns 9.27 per cent.