RBL Bank’s share price fell on Monday as the Reserve Bank of India said it had sufficient capital and was in good financial condition, but last weekend’s developments had a spillover effect.
The bank’s share price fell 18.32 percent (or £ 31.60) from its previous close of £ 172.50, closing at £ 140.90 per share. Shares reached a minimum of £ 132.35 and a maximum of £ 155.25. The opening price was also high during the day.
Two developments have cast a shadow over the World Bank’s stock. Last week, RBI appointed an additional board member (RBI Chief General Manager Yogesh K Dayal) to the board of directors of RBL Bank. In addition, bank MD and CEO Vishwavir Ahuja went on sick leave. These developments were interpreted by market players as meaning that everything was not going well with the World Bank.
Mentioning speculation related to RBL banks in a particular quarter, the RBI on Monday said depositors and other stakeholders do not need to respond to speculative reports. The World Bank’s financial position is stable.
Calling attention to RBL Bank’s semi-annual audit results as of September 30, 2021, RBI stated that banks maintain a comfortable capital adequacy ratio of 16.33% and a reserve coverage ratio of 76.6%. .. The Liquidity Coverage Ratio (LCR) is 153% as of December 24, 2021 against the regulatory requirement of 100%.
In addition, the Central Bank clarifies that additional directors of private banks will be appointed under Section 36AB of the Banking Regulatory Act of 1949 if the Board of Directors appears to require assistance in regulatory / supervisory matters. I made it.
In a media call on December 26, interim MD and CEO Rajeev Ahuja said RBL Bank and its management fully supported RBI. He emphasized that banks have an excess liquidity of approximately 15,000 chlores and are refinancing from RBI and bank lines to manage deposit volatility.
Full support for RBI
Rajeev Ahuja emphasized that these developments did not take into account concerns about progress, asset quality, and deposit levels. “We want to alleviate any concerns you may have in this regard. The World Bank fully supports the RBI. The Board of Directors is provisional to existing members of management. He has been promoted to MD and CEO roles, which should alleviate concerns about the bank’s strategy and smooth functioning, as well as the strength of the franchise as a whole, “he told the media.
Meanwhile, CH Venkatachalam, Secretary-General of the All India Bank Employees Association, called for immediate intervention by Finance Minister Nirmala Sitharaman for the benefit of RBL Bank depositors, and necessary measures, including the merger of banks and public sector banks. I considered taking.
The market was also bustling with reports that ace investor Rakesh Junjunwara and D-Mart founder RK Damani urged RBI to buy a 10% stake in the bank. However, this could not be confirmed.