The central government must protect the interests of its depositors at the private backed RBL Bank and co nsider merging it with a state-owned bank, said All India Banks Employees Association (AIBEA) after Reserve Bank of India made management changes at the private lender
Last night, RBL Bank said that its Managing Director and Chief Executive Officer Vishwavir Ahuja had gone on leave after the central bank appointed Yogesh K. Dayal as an additional director of the bank.
In a letter to Finance Minister Nirmala Sitharaman, AIBEA said, “We are worried and concerned about the latest developments that are taking place in the affairs of RBL Bank Ltd.”
The letter added Action for RBL is more important in light of the problems encountered by private lenders like YES Bank and Lakshmi Vilas Bank last year. RBL’s total business has doubled in the last few years from Rs 29,000 crores in 2017 to RS 58,000 crores now.
There were reports that RBL has been overindulging in retail credit, micro-financing and credit cards and consequently has burnt its finger resulting in weakening the financials, AIBEA said. The Kolhapur based bank has assured investors that it is, Well placed to execute its business plan and strategy, as communicated during the earnings, call dated October 28, 2021.
RBL said its financials are “robust with a healthy capital adequacy of 16.3 per cent, high levels of liquidity” as reflected through the Liquidity Coverage Ratio of 155 per cent. The net non-performing assets (NPA) were stable at 2.14 per cent, for the quarter ended September 30, 2021.
In addition, the bank said, “The business and Financial Trajectory continues to be on improving trend, post absorbing the challenges due to the outbreak of COVID-19.”