Indian benchmark indices trading flat right now. Despite positive global cues, our indices traded lower. However, they managed to recover from the earlier lows. Nifty Bank is still in red.
Nifty IT and Nifty Pharma doing well today. Most of the IT stocks are in green. Happiestminds is 5% up. On the other hand, Nifty Bank, Nifty Oil & Gas and Nifty Realty are dragging the index.
RBL Bank is 19.64% down. Today’s session seems to be a volatile session.
The RBI’s order to appoint Mr.Yogesh K Dayal, Chief General Manager, Reserve Bank of India as an additional director on the board of the RBL Bank for a period of two years, made RBL Bank stock to hit 52-week low today, i.e., December 27, 2021. It hits lower circuit after falling 20% as the market opens. As per Reserve Bank’s statement the tenure of Mr. Dayal will be w.e.f. 24th December, 2021 to 23rd December, 2023, or till further orders, whichever is earlier.
This development raised concerns over financial health of the bank. As a result, the stock nosedived as the trade started. However, the Board of Directors of the lender appointed Mr. Rajeev Ahuja, the current Executive Director, as its interim managing director & chief executive officer of the bank with immediate effect. He said that the appointment of Mr. Dayal as additional director on the board is not related to the asset quality or advances issue. On the other hand, bank’s long-term MD and CEO Vishwavir Ahuja, who had given 1 year extension by RBI in June, 2021, now has gone for leave.
There have been reports that ace investors, Rakesh Jhunjhunwala and Radha Krishna Damani have approached the RBI with a request to buy a 10% stake in RBL Bank. However, Rakesh Jhunjhunwala has denied this news.
Several brokerage agencies have expressed mixed opinions regarding this development.
In a nutshell, considering RBI’s actions in cases of Yes Bank and Lakshmi Vilas Bank (Now Dhanlaxmi Bank), investors became skeptical regarding RBL Bank. This made the stock to crash by 20%. The reasons behind the appointment of Mr. Dayal on board might see the light in forthcoming days.