RBL Bank slides back to its lowest in a year despite a new chief and RBI's assurances

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RBL Bank slides back to its lowest in a year despite a new chief and RBI's assurances
RBL Bank
  • Shares of RBL Bank slipped almost 10% on Thursday as investors are still worried about the lender’s business operations after its CEO went on leave.
  • RBI has approved the appointment of Rajeev Ahuja as interim MD and CEO.
  • Also, reports say that RBI is getting involved in the case because the lender wrote off ₹300 crore loan within seven months of being sanctioned.
Shares of RBL Bank, which is in a downtrend because of a mini crisis the lender is in, went down almost 10% on December 30 as investors continue to worry about the bank’s operations.

The stock kept falling even as the Reserve Bank of India (RBI) approved the appointment of Rajeev Ahuja as interim chief executive officer (CEO) and managing director (MD).

Investors started fretting after the company’s long term CEO and MD, Vishwavir Ahuja, went on a sudden leave, signalling deeper issues at the bank. At the same time, RBI appointed an additional director on the board.
RBL Bank slides back to its lowest in a year despite a new chief and RBI's assurances
Latest report by Mint says that the key reason behind the fiasco is that the lender’s write-off a ₹300 crore loan within seven months of being sanctioned.
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RBL Bank made the loan to a company as part of a consortium of lenders in 2018 and RBI has been seeking details about the bank’s loan portfolio from the risk department for the past few months, added the report.

Apart from the alleged misgovernance in the bank, the lender’s financial health is satisfactory, which also RBI assured in a statement.

“These developments are not on account of any concern on advances, asset quality and deposits level of the bank. The bank has the full support of the RBI,” said RBL Bank’s new interim CEO Rajeev Ahuja.
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In the September quarter, RBL posted a net profit of ₹30 crore as against a loss of ₹459 crore in the quarter before.

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