RBL Bank tumbles after India appoints director to board

RBL Bank shares plunged after a decision by India’s central bank to appoint a new director to the board raised concerns about the outlook for the small private-sector lender.

The stock dropped as much as 25% in Mumbai on Monday, the biggest decline since listing in 2016. It later pared the retreat to close 18.5% lower at $2 (140.95 rupees) after the Reserve Bank of India said the lender’s financial health “remains stable.”

The RBI appointed Yogesh Dayal, a career central banker, to RBL’S board for two years on the weekend. Meanwhile, Rajeev Ahuja was elevated as the interim managing director and CEO of the bank, succeeding Vishwavir Ahuja, who went on medical leave.

The central bank’s action comes as RBL grapples with a surge in soured loans to consumers during the pandemic, prompting the lender to boost provisions that led to a firstquarter loss.