RBI issues statement on RBL Bank, says bank’s financial position remains satisfactory
The Reserve Bank of India has issued a statement on RBL Bank after the private lender's shares tanked sharply in early trade on Monday. Here is all you need to know.
The Reserve Bank of India (RBI) has issued a fresh statement after shares of RBL Bank hit the lower circuit of 20 per cent in early trade on Monday.
Shares of the private lender tanked sharply in early trade after brokerages downgraded the stock as the Reserve Bank of India (RBI) appointed chief general manager Yogesh Dayal as an additional director in RBL Bank for up to two years from December 24, 2021.
The fact that RBL Bank’s MD and CEO Vishwavir Ahuja went on a sudden leave after the bank’s board approved his request to proceed on medical leave also affected the company’s stock.
Many brokerages expressed concern over the central bank’s sudden action as it could indicate some problems with the bank’s asset quality.
Explained: Why RBL Bank shares tumbled 20% today
RBI CLARIFIES
The RBI has now come out with a statement to clarify that the bank is well capitalised and its financial position remains satisfactory.
“There has been speculation relating to the RBL Bank Ltd. in certain quarters which appears to be arising from recent events surrounding the bank,” RBI said in a statement.
“The Reserve Bank would like to state that the bank is well capitalised and the financial position of the bank remains satisfactory. As per half yearly audited results as of September 30, 2021, the bank has maintained a comfortable Capital Adequacy Ratio of 16.33 per cent and Provision Coverage Ratio of 76.6 per cent,” the statement added.
The central bank also said that the Liquidity Coverage Ratio (LCR) of the bank was 153 per cent as of December 24, 2021, as against the regulatory requirement of 100 per cent. It also clarified that the appointment of the additional director in the private bank was not due to any concern.
“It is clarified that appointment of Additional Director/s in private banks is undertaken under Section 36AB of the Banking Regulation Act, 1949 as and when it is felt that the board needs closer support in regulatory / supervisory matters. As such, there is no need for depositors and other stakeholders to react to the speculative reports. The bank’s financial health remains stable,” RBI said.
RBL Bank's shares were trading at Rs 143, down 17 per cent, on the Bombay Stock Exchange (BSE) at 14:40 pm.