Appointment of R Gandhi as additional director a positive move: Yes BankPTI | Mumbai | Updated: 17-05-2019 15:09 IST | Created: 17-05-2019 15:09 IST
Yes Bank Friday said appointment of former RBI Deputy Governor R Gandhi as an additional director on its board is a positive move which will not impede smooth functioning at the private sector lender. Welcoming the appointment in a statement, the city-headquartered bank said the appointment is "very positive and constructive measure" to strengthen the board.
It added the Reserve Bank of India (RBI) is supportive of a "strong and successful" Yes Bank. It can be noted that there are very few precedents of such action by RBI in the private sector bank space and none in the new-age private sector banks.
The Yes Bank scrip took a beating since the appointment of Gandhi, but was trading 0.40 per cent up at Rs 138.35 a piece at 1310 hrs Friday. "We warmly welcome the appointment of R Gandhi to the Board of Yes Bank by RBI under Section 36AB of the Banking Regulation Act, 1949. This is a very positive and constructive measure aimed at further strengthening the Board," a bank statement said.
"This will not impede the smooth, independent and effective functioning of the Bank in any way," it said. The RBI had cut short the term of the lender's promoter-chief executive Rana Kapoor on concerns over governance. The RBI action had come after two consecutive years of the bank having been found of under-reporting its stock of NPAs.
The bank hired former Deutsche Bank India head Ravneet Gill to replace Kapoor. In the first quarter under Gill, it reported a maiden loss of Rs 1,506 crore. Gill had said the bank expects significant losses on its exposure to low-rated borrowers and made provisions for the same, resulting in the loss. Analysts had also welcomed the appointment of Gandhi, saying this signifies that the RBI is working in tandem with the bank's new management.