The board is set to meet on September 25 to decide on the action plan after the RBI directive that cut short Rana Kapoor’s term as CEO and MD up to January 31, 2019
A day before its board meeting, Yes Bank reassured investors of the bank’s commitment to its stakeholders along with its strong financial position.
“At the outset, the Bank would like to inform its stakeholders that the Bank and its MD & CEO (managing director and chief executive officer) will be fully guided by its Board of Directors (meeting scheduled on September 25, 2018), the Reserve Bank of India and other relevant stakeholders. The Bank’s management remains committed to protecting the interests of all of its stakeholders,” Yes Bank said in a statement to the stock exchanges.
On September 19, the Reserve Bank of India (RBI) had cut short Rana Kapoor’s tenure to five months allowing him to serve as the bank’s chief only up to January 31, 2019.
The board is set to meet on September 25 to decide on the action plan after the RBI directive.
In the statement, Yes Bank stated, “The Bank has a demonstrated track record of consistent delivery of business & financial outcomes over the last 14 years, since the commencement of its operations in mid-2004, across all critical parameters such as capital adequacy, credit risk, profitability, operating efficiency, growth, etc.”
The bank also reiterated the credit cost guidance for FY19 at 50-70 basis points (bps) as shared by the management in the FY18 / Q4FY18 results, it added.
Apart from listing out the strong ratings by different agencies, Yes Bank also pointed out its capital strength, brand value and other positives.
This comes amid rising uncertainty on the bank’s future leadership, which is also compounded by a Bombay High Court order of June 4, 2015, which makes it difficult to appoint a suitable candidate for the CEO’s post or even appoint a whole-time (executive) director. The High Court order reiterates that as per the Articles of Association of the Banking Regulation Act, both the promoters can only appoint a director jointly.
Given the dispute between the two promoters (Rana Kapoor and Madhu Kapur) of Yes Bank, they have been unable to come to an understanding on jointly recommending whole-time directors or settle any major issue in the management of the bank.
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