Yes Bank's 15-month journey from regulatory crackdown to finding a new CEO
Gill’s appointment caps a tumultuous period for Yes Bank, following a clampdown by India’s central bank. Gill is expected to step into the role on March 1st for a three-year term.
The move was greeted favourably by equity investors, with the bank’s shares surging 16% in the last session of trading on Thursday.
Here all the events leading up to the announcement:-
October 23rd, 2017
June 12th, 2018
At an annual shareholders’ meeting, Yes Bank’s shareholders voted to give Rana Kapoor another three-year term as the bank’s CEO starting September 1st. Kapoor’s re-appointment did, however, depend upon a greenlight from the central bank.
August 30th, 2018
After deliberating for more time than was initially expected, the RBI approved Yes Bank’s decision to have Kapoor continue in his role as Managing Director and CEO a day before his term was set to expire. The approval came with a slightly suspicious caveat: Rana Kapoor was allowed to continue as CEO ‘till further notice’.
September 19th, 2018
In a glaring about-turn, the RBI refused to extend Rana Kapoor’s tenure as CEO of Yes Bank, giving him four months (until January 31st, 2019) to vacate the position. The move had precedence. Earlier in the year, the central bank refused to clear a three-year extension of the tenure of Shikha Sharma, the CEO of Axis Bank, as the bank dealt with its own host of bad loan calculation problems.
September 20th, 2018
Yes Bank’s share price plummeted by over 29% on the first day of trading since the RBI’s decision was announced - a loss of nearly $3 billion worth of market capitalisation. The price drop exacerbated a freefall in Yes Bank’s share price since August, which culminated in the loss of half the bank’s market value.
September 25th, 2018
The board of directors of Yes Bank met to assess the situation. At the meeting, they decided to request the RBI to reconsider its decision. They wrote to the RBI asking for an extension for Kapoor’s tenure till at least the end of April 2019 to finalise the bank’s year-end financial statements. The board also set up a search committee to find a replacement for Kapoor.
October 1st, 2018
CARE Ratings, a credit ratings agency, placed Yes Bank’s debt on ‘credit watch with developing implications’, causing further investor jitters.
October 17th, 2018
The RBI rejects the request submitted by Yes Bank’s board of directors seeking a minor extension for Kapoor. To allay investor fears, Yes Bank says that it should conclude the CEO search process by mid-December 2018.
October 19th, 2018
Rana Kapoor met with another Yes Bank promoter Madhu Kapur, the wife of Yes Bank’s co-founder - the now-deceased Ashok Kapur, to discuss a possible formation of a single promoter group, ending a decade-long dispute and paving the way for a smooth succession plan for the bank.
October 25th, 2018
Yes Bank posted a 4% drop in net profit for the quarter ended September 2018 owing to higher provisions for loan losses. Gross
November 14th, 2018
The bank’s non-executive chairman, Ashok Chawla, submitted his resignation owing to the fact that he was the subject of a corruption probe. In July 2018, Chawla, who was also the chairman of the National Stock Exchange of India (NSE), was named in a chargesheet filed by the Central Bureau of Investigation in relation to the Aircel-Maxis case. In its announcement, Yes Bank said that it needed a chairman that could devote more attention to the bank as it navigated the management transition period.
November 27th, 2018
Following a number of resignations from Yes Bank’s board, Moody’s Investors Service downgraded Yes Bank’s credit rating to non-investment grade and changed the bank’s outlook to negative from stable.
November 29th, 2018
News reports emerged that Rana Kapoor was seeking to maintain control of Yes Bank by taking over the chairmanship of the company. The move, however, never came to fruition.
December 3rd, 2018
T S Vijayan, was appointed to Yes Bank’s board as an independent director for five years. The move was expected, given that former chief of LIC and the Insurance Regulatory and Development Authority (IRDAI) was also on the CEO search and selection committee.
January 10th, 2019
The board of directors of Yes Bank submits a list of potential CEO candidates to the RBI for the latter’s approval. The board highlights Gill as their most preferred candidate to take over the role.
January 12th, 2019
Yes Bank named Brahm Dutt as its new non-executive chairman on a part time basis. A board member since 2013, Dutt’s tenure is capped till July 2020, when he is scheduled to turn 70 years old.
Yes Bank’s problems get further compounded as its chairman is forced to resign amid a corruption probe
One of India’s largest private banks has lost more than half its market value in 37 days