Shocking Set Back: RBI Wants Yes Bank to Find Replacement of Rana Kapoor by January 2019

The Reserve Bank of India has curtailed the term of Yes Bank founding CEO Rana Kapoor and asked the private sector lender to look for his replacement by January 2019. Rana Kapoor, who has been managing director and CEO since the bank's inception in 2004, had sought a three-year extension till August 31, 2021. However, the sector regulator did not agree to the request and permitted him to continue only till January 2019.

"Reserve Bank of India has vide letter dated September 17, 2018 received, intimated that Mr. Rana Kapoor may continue as the MD & CEO till 31 January 2019, and the Board of Directors of the Bank are scheduled to meet on September 25, 2018 to decide on the future course of action," the bank said in a statement.

In June this year, Yes Bank's shareholders had approved the re-appointment of Kapoor for three years, subject to final approval from the Reserve Bank of India (RBI).

His present term ended on August 31. However, the RBI had allowed him to continue till further notice.

RBI approved the reappointment of Rana Kapoor as MD and CEO of Yes Bank on August 30, 2018 but did not specify the period.

Earlier this year, RBI denied a three-year extension to Axis Bank CEO Shikha Sharma despite the board endorsing her reappointment.

Kapoor was part of the founding team of Yes Bank, along with Ashok Kapur who died in 2008. As a promoter, Kapoor and his family own 10.66 per cent stake in the bank.