RBL Bank financial position remains satisfactory, says RBI

The Reserve Bank of India (RBI) has clarified that RBL Bank is well capitalised and the financial position of the bank remains satisfactory and there is no need for depositors and other stakeholders to react to speculative reports related to banks. In its notification, the Central Bank further stated that as per half-yearly audited results as on 30th of September, the bank has maintained a comfortable Capital Adequacy Ratio of 16.33 per cent and Provision Coverage Ratio of 76.6 percent. The Liquidity Coverage Ratio (LCR) of the bank is 153 percent as on 24th of December as against regulatory requirement of 100 percent. Further, it is clarified that appointment of Additional Director/s in private banks is undertaken under Section 36AB of the Banking Regulation Act, 1949 as and when it is felt that the board needs closer support in regulatory or supervisory matters.

The stock of the bank closed 18.32 per cent down to close at Rs 140.90 a piece on the BSE. The stock slipped after the bank’s managing director and CEO, Vishwavir Ahuja, went on leave on December 25 and an interim CEO was appointed. The bank also started looking for Ahuja’s replacement. The bank’s board of directors is currently engaged in finding Rajeev’s successor, a process that may take four to six months. Meanwhile, the All India Bank Employees Association (AIBEA) said the Centre must protect the interests of depositors at RBL Bank. It should consider merging RBL with a state-owned bank, said the industry trade union. There are also reports that RBL has been overindulging in retail credit, microfinancing, and credit cards. Consequently, it has burnt its fingers resulting in weakening the financials, the AIBEA said.