YES Bank to name new MD by January

Private lender YES Bank said it has geared up for the succession of the bank’s MD & CEO Rana Kapoor, whose term was cut short to January 31 by the Reserve Bank of India. In an attempt to counter the bank’s dipping share prices, it also revealed key performance figures for the September quarter. The bank’s stock, which had been falling for the past two days owing to uncertainty surrounding its succession plan, has seen an uptick following this announcement. The stock closed at ~201.80 on the BSE, up by nearly 10 per cent from the previous close.

“We will decide the successor before January, and are not depending on an extension (of Kapoor’s term),” said Rajat Monga, senior group president, while addressing an analysts’ call on Monday. Monga said the options sent to the regulator would be a combination of internal and external candidates. However, it has still not been decided whether Kapoor would continue as director or not, he said.

CARE Ratings placed the various debt instruments of YES Bank on “credit watch” with developing implications on Saturday. “Kapoor has been instrumental for the bank’s growth since its inception, and the selection of his successor would be critical for the future prospects of the bank,” maintained the ratings agency.

Last week, the bank announced plans to seek permission from the Reserve Bank of India (RBI) for an extension of Kapoor’s term as Managing Director (MD) and Chief Executive Officer (CEO), which led to the bank being accused of not having a proper succession plan in place. The bank had set up a ‘‘Search and Selection Committee” in accordance with the RBI’s letter, which instructed the former to search for Kapoor’s successor. The bank on Monday said names of the two external experts would be finalised by October 7. YES Bank had appointed two senior leaders Rajat Monga and Pralay Mondal as executive directors, pending RBI approval for longterm succession planning.