The Reserve Bank of India (RBI) is likely to withdraw its official Yogesh Dayal from the board of RBL Bank ahead of the expiry of his term after a forensic audit did not find major red flags regarding the bank’s non-performing assets, sources told businessline.
RBL has also appointed head-hunter Egon Zehnder to search for a top-notch board member, who can be entrusted with a larger role later, the sources said.
Concerns on NPAs
Dayal, RBI’s chief general manager, was appointed as an additional director on the RBL board in December 2021 for two years or until further orders, whichever comes first. It was following concerns about rise in NPAs.
Within days, RBL’s then MD and CEO, Vishwavir Ahuja, with a 12-year stint, was sent on leave. Both RBI and RBL did not provide more information about such moves, but rumours said 10 to 18 large accounts of the bank were under scrutiny. RBI usually makes such appointments when it sees the need for closer scrutiny on financials or governance issues.
Preventive step
In the second quarter of financial year 2021, the gross and net NPAs of RBL stood at 3.34 per cent and 1.38 per cent. Also, the net profit crashed from ₹867 crore in 2018-19 to ₹508 crore in 2020-21. Following this, the RBI and RBL boards started their examinations as a preventive step.
Decision to call back Dayal was taken recently after the forensic audit report was submitted to the RBL board and RBI. Egon Zehnder has shortlisted a few names, including those of former foreign bankers, the sources said. When contacted, RBL said they had no comment. RBI did not respond to the email queries.