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

Financial Chronicle - - FRONT PAGE - FALAKNAAZ SYED

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.

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