Mumbai: Yes Bank chairman Ashok Chawla has written to employees asking them to go beyond their assigned roles to clarify retail investors’ doubts and build a deeper relationship with every borrower.
Chawla’s letter comes after the Reserve Bank of India (RBI) cut short managing director Rana Kapoor’s term to 31 January. Stocks fell steeply over the past few weeks, before making a recovery on Wednesday.
Chawla, in an internal letter to staff on Monday, said the bank is “transiting through a process of change".
“Our most immediate focus is in ensuring continued and uninterrupted services to our customers.....Retail investors may approach you with request for clarifications. Irrespective of your assigned role and responsibilities, it should be your endeavour to respond to them with fullest ownership and agility. Use each customer engagement as an opportunity to build a deeper relationship," Chawla said to the bank’s 20,000 staff in his letter, a copy of which has been reviewed by Mint.
RBI on 17 September rejected the board’s request for a three-year extension for Kapoor till 31 August 2021. The board met on 25 September, stating that it will ask RBI to grant an extension of eight months for Kapoor.
However, the board’s decisions and assurances on the bank’s asset quality to investors could not stop a crash in the bank’s stock between 20 August and 28 September, the last market day before Chawla sent the letter. Yes Bank’s shares tumbled by a staggering 59% from its high of ₹ 404 to ₹ 166.15 apiece on BSE. The stock has slightly recovered but is still trading 47% down from its 20 August levels.
The fall in the bank’s market value and quick erosion in investors’ wealth—primarily over uncertainties surrounding the bank’s succession plans—have prompted senior management to discuss the bank’s ongoing strategy with at least half a dozen asset management companies (AMCs) and institutional investors over the past week. These include Reliance Capital Asset Management Ltd, Kotak Mahindra Asset Management Co. Ltd, Franklin Templeton Asset Management (India) Pvt. Ltd and Matthews International Capital Management Llc. Franklin Templeton, through its domestic AMC arm and its foreign portfolio investors holds at least 3% in Yes Bank.
On 1 October, the bank said that a search and selection committee will be appointed within a week to find a successor to Kapoor.
Chawla, in his letter urged staff to also communicate the facts about the bank to their friends and family members so as to enlist their support and encouragement in this phase.
“The management team has successfully managed multiple exogenous situations over the past 14 years, and with the combined efforts of our 20,000+ employees, we will certainly emerge stronger post this transitory phase," added Chawla in the letter.