Ravneet Gill is attempting to build a perception that Yes Bank is no longer under the influence of Rana Kapoor. (Mint)
Ravneet Gill is attempting to build a perception that Yes Bank is no longer under the influence of Rana Kapoor. (Mint)

CEO Ravneet Gill planning to replace entire top management of Yes Bank

  • CEO Ravneet Gill is looking to replace the entire top management of Yes Bank, including some of ousted founder Rana Kapoor's trusted aides
  • In a span of two weeks, at least 14 top executives of Yes Bank have been listed for a potential replacement, a move unprecedented in India’s banking industry

Mumbai: Yes Bank new CEO Ravneet Gill is looking to replace the entire top management of the lender, including some of ousted founder Rana Kapoor’s trusted aides, to remedy corporate governance lapses, and lax risk management and credit disbursal policies that were pointed out by the central bank last year, three people directly aware of the development said.

In a span of two weeks, at least 14 top executives of Yes Bank have been listed by the bank for a potential replacement, a move unprecedented in India’s banking industry.

“RBI advised the board and Gill to review the decisions taken by Rana Kapoor both in terms of business and key management-level hires," one of the three people cited earlier said on condition of anonymity. “RBI suggested the board feel free to reverse any appointment decision taken by Kapoor, if it is required to clear the bank of Kapoor’s influence and strengthen the bank’s governance and credit disbursal processes."

The executives whose replacements are being considered by Yes Bank include Rajat Monga, group president; Rajiv Anand, group president and national head of corporate finance; Raj Ahuja, group chief financial officer; Kumar Padmanabhan, chief operating officer; and Ashish Agarwal, chief risk officer.

There are at least eight more top management executives whose replacements are being contemplated by the bank under Gill’s leadership.

A Yes Bank spokesperson replied to an email stating that Mint’s query is entirely incorrect, “totally unfounded and baseless and we deny the same".

“As on date, all these officials are working with the bank. They may leave or be replaced by the bank in future. But putting a timeline will be speculative," said the spokesperson on the phone.


A Yes Bank spokesperson had earlier termed speculative a 7 January Economic Times report that its group president of retail banking, Pralay Mondal, was quitting to join Axis Bank. On 1 February, Mondal joined Axis Bank.

On 21 November, Mint reported that R. Chandrashekhar resigned from Yes Bank, questioning certain corporate governance practices in his resignation letter.

In the latest development, the eight other top executives whose replacements are being planned by Yes Bank include senior officials from the infrastructure finance division, transaction banking and payments business division; government banking department; MNC banking division; corporate banking department; compliance division; human resources department; rural and inclusive banking division; and SME banking department.

“Yes Bank has appointed a global headhunting firm to shortlist 14 candidates for the key positions that will be replaced by new candidates. A complete replacement of the positions vacated will take 2-3 months," the first person said, adding that some of the officials might be given different portfolios within Yes Bank when new candidates take over their existing roles.

Ahuja joined Yes Bank as the group chief financial officer in April last year and was reporting directly to then managing director Kapoor. Ahuja took over from Monga, who was handling the portfolio in addition to his other responsibilities.

Monga has been one of Kapoor’s most trusted lieutenants since the bank’s inception. In fact, while Kapoor was on his way out, Monga was a top contender for CEO.

But RBI’s insistence on a complete overhaul of the bank’s systems and processes has prompted Gill to replace the bank’s top management with a new set of executives, said the first person.

“Since Monga’s name has been nominated jointly by Rana Kapoor and Madhu Kapur to be a director of Yes Bank, therefore his termination is still under consideration. A final decision may be taken by the board in its upcoming meeting this month," added the first person.

At present, Anand and Puneet Malik are responsible for Yes Bank’s corporate finance, commercial and infrastructure credit businesses, portfolios that are at the core of RBI’s concerns. In its report on divergence in asset classification, loans given to firms falling under these portfolios were the primary cause for the bank’s failure to assess credit quality and classify bad loans appropriately. “RBI has pointed out weak credit disbursal processes under these portfolios," said the second person.

Anand is serving a notice period and his position has already been filled by Lata Pillai from Deutsche Bank AG, added the second person.

RBI’s questions on Yes Bank's credit quality under Anand automatically implied failure of the risk management processes employed by the bank that come under Ashish Agarwal, according to the first person.

Since the RBI letters had pointed out that Yes Bank has a weak compliance culture, the bank’s compliance department too may undergo a change. Devamalya Dey heads that division.

Responding to separate emails sent to the executives cited in the story, a Yes Bank spokesperson asked Mint to refer to the bank’s official statement.

On 30 November, Mint reported that RBI and Yes Bank exchanged at least eight letters related to persistent governance and compliance failures and violations of statutory and regulatory rules before the regulator decided to reject a request to extend Kapoor’s tenure.

According to the first person, the bank’s operational risks too were not handled appropriately under Kapoor, which is why the bank not only continued lending to companies and projects with poor or questionable creditworthiness but also allowed it to spend money on subsidiaries and businesses that fetched no additional income.

The bank is now planning to restructure this division too. Currently, Kumar Padmanabhan heads this division as the bank’s chief operating officer.

Recently, Yes Bank issued a statement saying RBI had found the lender to be non-divergent in terms of asset classification. Later, RBI expressed its discomfort with such a public announcement, stating that every bank is supposed to assess and classify its assets appropriately and hence “nil-divergence" of the bank with RBI’s assessment in terms of asset classification is not something to boast about, especially because it could falsely boost investors ’ sentiments. Due to this reason, Yes Bank is also contemplating changes in the division headed by Shivanand Shettigar.

On Wednesday, Yes Bank shares rose 2.71% to 239.15 apiece on the BSE while the benchmark Sensex gained 1.27% to end the day at 39,054.68 points.

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