RBI Clarification on RBL Bank; says bank health ‘stable’

RBL Bank Ltd is “fully capitalised and the financial status remains excellent,” according to the Reserve Bank of India (RBI). The explanation comes as “speculation relating to the RBL Bank in certain quarters appears to be arising from recent developments surrounding the bank,” according to the RBI.

“The bank maintained a comfortable Capital Adequacy Ratio of 16.33 percent and a Provision Coverage Ratio of 76.6 percent as of September 30, 2021, according to half-yearly audited data. As of December 24, 2021, the bank’s Liquidity Coverage Ratio (LCR) was 153 percent, compared to a regulation requirement of 100 percent” The Reserve Bank’s notification said.

“Furthermore, it is clarified that Additional Director/s in private banks are appointed under Section 36AB of the Banking Regulation Act, 1949 as and when it is believed that the board requires closer support in regulatory or supervisory concerns,” it added.

“As a result, depositors and other stakeholders do not need to react to the speculative reports,” the RBI letter continued.

RBL Bank’s stock plummeted today after its chief executive resigned and the RBI named an executive to the bank’s board of directors. On the BSE index, the private lender’s stock dropped as much as 20% to its lower price band of 138.

Yogesh Dayal, the RBI’s chief general manager, has been appointed as an additional director of RBL Bank for a two-year term.

The board of RBL has approved managing director and chief executive officer Vishwavir Ahuja’s request to go on medical leave with immediate effect.

Earlier, the umbrella body for bank employee unions, AIBEA, wrote to Union Finance Minister Nirmala Sitharaman, expressing worry that everything was not right at RBL Bank and that it was heading in the same direction as Yes Bank and Lakshmi Vilas Bank.

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