The sudden departure of Vishwavir Ahuja as CEO and the banking regulator’s move to send his nominee to the board of directors of financial institutions before Christmas have raised concerns about the monetary strength and asset quality of individual lenders.
Although this move shows that the Reserve Bank of India (RBI) is serious about strengthening lenders and ensuring the cleanliness of the management transition, traders believe that this will be a long journey, as new fundraising activities and maintaining current prospects will show up as a problem. New CEO Rajeev Ahuja.

“I will not change the bank’s financial situation little by little. RBI provided its full support, and in our dialogue with it, the regulator did not encounter any problems,” interim CEO Ahuja told ET. “We have to manage the next few days; Ahuja added that this financial institution is sitting on 15,000 crore additional liquidity, which may be enough to deal with any potential concerns arising from the sudden deposit outflow. Ahuja is waiting for RBI’s appointment. He also mentioned that the financial institution is sufficiently capitalized and does not need to increase funds in the next 8-12 months.

On Saturday, the personal lender mentioned in a regulatory document that its managing director and chief executive Vishwavir Ahuja had quickly resigned. After another important announcement, his withdrawal was closed. The banking supervisory authority has decided to nominate its chief basic supervisor Yogesh Ok Dayal as an additional director to the RBL board of directors for a two-year term, which has quickly had an impact.

“I don’t want to represent the Reserve Bank of India; regulators have a broader agenda, and their nomination is a measure to strengthen the ongoing process,” Rajiv Ahuja said. “I was selected as the successor; both the board of directors and the RBI nominee approved it. The change in leadership was not due to internal developments in the bank.”
Appointing an RBI nominee on the board of a financial institution in the personal sector is almost a kind of energy, and the regulatory agency implements it specifically to protect depositors.

“In the past few years, their clumsy methods failed to spot the brewing troubles of Yes Bank, Lakshmi Vilas Bank, DHFL, PMC, Reliance Capital, etc. and were severely criticized. The Reserve Bank of India must feel the need to precede the panic. The alarm is ringing among small depositors,” said Ajay Bodke, an impartial market analyst.

Earlier this year, RBL sought RBI’s approval to reappoint Vishwavir Ahuja as CEO for a period of three years. Nevertheless, the regulator allows lenders to extend their deadlines by one year, starting on June 30, 2021.

Despite market concerns, RBL traders are still supporting the new guard.

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