Rajat Monga tops list to head Yes Bank
The bank board said it has selected candidates to replace Rana Kapoor but didn’t disclose names
In a sudden development, Rajesh Sud, former managing director and CEO of Max Life Insurance, one of the frontrunners to head Yes Bank, has backed out from the race making Rajat Monga, senior group president of financial markets at the bank as the top contender for the post, sources told Financial Chronicle.
“Sud was a contender but has informed the board that he doesn’t want to pursue this position,” said the source.
The Yes Bank board on Wednesday said it has selected potential candidates to replace founder and CEO Rana Kapoor, without naming them.
Brahm Dutt, an ex-IAS officer who has been on the board since 2013, is said to be the frontrunner for the post of non-executive chairman.
Monga has been with Yes Bank since its inception in 2004. Since June 2013, Monga has served as CFO and a whole-time director until 2014. Earlier, Monga worked with Rabo India Finance as head of financial markets. He also served Unit Trust of India as a part of the market operations department.
Apart from Sud and Monga, few more names that had hit headlines as contenders to top Yes Bank post are V Srinivasan, deputy MD at Axis Bank, whose term ended in December 2018.
“Pursuant to the recommendations of the search & selection committee and the nomination and remuneration committee, the board of directors at its January 9, 2019 meeting has finalised names of potential candidates for the position of MD & CEO,” said Yes Bank in a statement to the stock exchanges.
The bank’s board will submit an application to the Reserve Bank of India (RBI) on January 10 seeking approval for the appointment of the new MD & CEO and make requisite disclosures to stock exchanges once its gets RBI nod added the statement.
Kapoor has to step down by end of this month as RBI refused to extend his tenure after finding discrepancies in the way the bank reported its bad loan numbers.
Earlier in September 2018, RBI had communicated to bank that Kapoor could continue till January 31, 2019 against the threeyear extension approved by shareholders in June 2018.
Subsequently, upon recommendations of nomination and remuneration committee, the bank had set up a search and selection committee to look for new MD & CEO.
The bank had reported material divergences in its asset quality during the last two risk-based supervision audits conducted by RBI (FY16 and FY17). It reported a divergence of Rs 6,355 crore in the gross NPA (4.5 per cent of gross advances) as on March 31, 2017 from RBI-assessed amount.
Of the total amount reported as divergence as on March 31, 2017, only 7.63 per cent stood as NPAs as on March 31, 2018 while the balance was either repaid in full/partially (38.3 per cent) or upgraded as standard (41.4 per cent) due to the satisfactory performance of the account or was sold to ARCs (12.6 per cent).
In November, global rating agency Moody’s downgraded the bank’s foreign and local currency bank deposit ratings to Ba1/NP from Baa3/Prime-3 and foreign currency senior unsecured MTN programme rating to (P) Ba1 from (P) Baa3.
A Macquarie research report had said, Monga has been with the bank since inception, also acting as its CFO when the alleged ‘incorrect accounting’ was done and RBI may not be willing to grant him a board seat either.
Shares of Yes Bank settled 3.07 per cent down at Rs 186.40 on the BSE onWednesday amid reports of block deals ahead of its board meeting when the name of the boss was expected to be announced.