No problem with asset quality, will work on governance and risk fronts: new head of RBL Bank

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RBL Bank Managing Director and Acting Managing Director Rajeev Ahuja on Sunday sought to allay concerns about the health of the private sector lender, stressing that the events of the weekend were not related to the quality of the advances or to the the quality of assets. Rajeev, an executive director of the lender who was raised by the board of directors after his predecessor Vishwavir Ahuja’s leave following the appointment of an additional director by the RBI on the bank, said the bank will post better profits during the December quarter than the previous one. September quarter.

He said the bank would stick to all of the targets set out in the September earnings call, but acknowledged that microfinance lending is an area that needs more attention.

“We need to improve the game in the areas of services, governance, digital and risk,” Rajeev told reporters.

He claimed the bank’s board had already chosen him as Vishwavir’s successor, and RBI-appointed additional director Yogesh Dayal also voted for his appointment as chief executive and CEO in a meeting held this weekend. The central bank fully supports the bank and its strategy, he added.

Vishwavir, whose leave announcement came after RBI moved and six months before his tenure ended, had to do so for medical reasons, his successor said, without sharing details. Vishwavir was at the heart of the bank’s team transformation exercise and the new management will continue the same program, Rajeev said.

Asked about the RBI’s action, which has some precedent, Rajeev said the central bank would have its own specific reasons for making such an appointment, but declined to share details.

When asked about what he thinks are the RBI’s areas of focus, Rajeev highlighted compliance and risk management as possible priorities, but quickly added that these were also the internal interests of the bank. .

RBL Bank, which had been under pressure on deposits after the RBI’s action on Yes Bank in 2020, has excess liquidity of over Rs 15,000 crore and also many lines of liquidity, Rajeev said, adding that ‘he was taking action to reach customers.

The last 24 hours since the wave of announcements have not seen any major withdrawals, he said, noting that Yes Bank’s case was different.

The bank will review the capital raising exercise not until the end of fiscal 23, he said, adding that at present its core capital buffers stand at over 15%. thanks to a fundraising of Rs 1,500 crore in November 2020, and that won’t go for a capital raise until it slips below 14 percent.

Growth is back in the bank after the second wave of COVID, Rajeev said, stressing that he will continue his strategy to reduce reliance on unsecured credit. The bank will start growing its portfolio back to the normal level of 15-20% in fiscal 23, he said.

Currently, a large portion of the bank’s retail loans come from microfinance and unsecured credit card portfolios. We can see that it has suffered setbacks on both fronts and that micro credits have come to sting a lot in the second wave of the pandemic.

Rajeev said the bank would reduce its non-performing net assets below the 2 percent level by the targeted March 2022, from 2.33 percent in September 2021. Credit costs will also remain at the target of 55 to 60 percent. levels from April to September in the second half of the year, he added.

As for the stress on the microfinance portfolio, he said it had been recognized either in the income statement or by restructuring the asset in question, and exuded confidence that all problems would be behind them by the next. fourth trimester. When asked specifically whether he was aware of any investigations against any of the directors, Rajeev said he was not aware of them.

He said that for the next week his goal was to stay calm, rally the more than 16,000 employees of the bank and make sure she only got away with scars, and had the looked like the difficulties would go away in the next 2-3 weeks.

(This story was not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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