RBI refuses more time to Yes Bank CEO Rana Kapoor2 min read . Updated: 18 Oct 2018, 04:13 AM IST
Reserve Bank of India (RBI) has directed Yes Bank to appoint CEO Rana Kapoor's successor by 1 February 2019
Mumbai: Effectively rejecting Yes Bank’s request to extend managing director (MD) and chief executive officer (CEO) Rana Kapoor’s tenure, the Reserve Bank of India (RBI) directed the bank to appoint his successor by 1 February 2019.
“The Reserve Bank of India has reaffirmed that a successor to Rana Kapoor should be appointed by 1 February, 2019," the private sector lender said in a statement to stock exchanges on Wednesday.
In June, Kapoor had sought a three-year extension till 31 August 2021, but the regulator had agreed to extend his term only till 31 January 2019.
On 25 September, the bank’s board said that it would ask RBI to grant eight months’ extension to Kapoor.
It said that it will first seek Kapoor’s extension till 30 April so that he could help finalize the financial statements for the year ending 31 March 2019. Thereafter, it would apply for yet another extension till 30 September so that Kapoor could preside over the annual general meeting.
“The board also decided that, given the role of Rana Kapoor as MD and CEO since inception of the bank in 2004, and the time consuming challenges of finding a suitable successor, the incumbent MD and CEO be given further time in his current position beyond 31 January, 2019," the statement had said.
On Wednesday, the bank reiterated that the managing director and chief executive officer will be fully guided by the board of directors, the RBI and other relevant stakeholders. “Further as stated in the bank’s release dated 11 October, 2018, the search and selection committee has mandated Korn Ferry to assist the committee in evaluating both internal and external candidates."
It added that the committee is targeting to complete this recruitment process by mid-December 2018.
As part of the succession plan, the board had decided to elevate Rajat Monga and Pralay Mondal as executive directors, subject to RBI approval. Both Monga and Mondal are considered to be front runners for the top job.
Meanwhile, Mint reported on 8 October that Yes Bank’s estranged promoters—Rana Kapoor and Madhu Kapur —have initiated moves to reach an out-of-court settlement, citing three people close to the development.
Both sides have begun preliminary talks to withdraw a long-drawn and bitter legal case against each other and put an end to their decade-old feud.
If taken to its logical conclusion, the move will remove uncertainties surrounding the bank’s succession plans, simplify the board’s functioning and possibly help burnish the bank’s stained credentials.