RBL Bank Interim CEO Says RBI Not Worried About Bank's Sustainability
A day after the Reserve Bank of India appointed an additional director on RBL Bank's board and MD and CEO Vishwavir Ahuja went on "medical leave", the bank claimed that these events are not a reflection of its financial performance.
Rajeev Ahuja, executive director of the bank who was appointed interim MD & CEO on Saturday, said that the regulator's decision to appoint a director was largely to "strengthen the board."
While addressing reporters over a conference call on Sunday, Ahuja said that the regulator had full faith in the bank's management and its financial position.
"Bank and current management team have the full support of RBI. The developments are not in any manner a reflection on our performance. We are expecting Q3 to be even better than Q2 this year, while Q4 would bring us back on track as we were pre-Covid," Ahuja told reporters. "We have absorbed all the challenges on asset quality."
According to Rajeev Ahuja, the process of finding a successor for Vishwavir Ahuja had begun last year, when the regulator only gave a one year extension to the former MD and CEO. Vishwavir Ahuja's term was set to end in June 2022.
"The board has elevated an existing member of the management team to the MD & CEO role, which should allay any concerns on the strength of the frranchise," Rajeev Ahuja said.
While he has been identified as a potential successor, his final appointment as MD & CEO is subject to the RBI's approval, Ahuja said.
Other issues highlighted by Rajeev Ahuja include:
Not aware of any governance related investigations against any members of the bank.
Regulator's view is that the bank is progressing well financially, but more needs to be done on compliance and risk management.
Don't wish to speculate on Vishwavir Ahuja's exit six months before his term ended.
Have already been working on a transformation plan for RBL Bank over the last few months.
Do not expect any changes in our approach with the recent leadership change. The transformation plan is a collective effort, not an individual's vision.
Growing microfinance portfolio cautiously as we are still concerned with the vulnerabilities in the business.
Intend to grow the credit card business, alongside the secured lending businesses.
Have not seen elevated withdrawals in automated teller machines after last evening's announcements, indicating the customer's trust in the franchise.
Expect traction in earnings from FY23 onward.