September 25, 2018 / 2:06 PM / a month ago

Yes Bank to seek RBI nod to extend CEO's term

(Reuters) - Yes Bank Ltd said on Tuesday it would seek the Reserve Bank of India’s (RBI) approval to extend Chief Executive Officer Rana Kapoor’s term beyond January, saying it needs more time to identify and groom a successor.

A security guard stands outside a Yes Bank branch at its headquarters in Mumbai, January 17, 2018. REUTERS/Danish Siddiqui/Files

The RBI said last week that Kapoor could serve as CEO only until Jan. 31, despite shareholders seeking to extend his term for three more years.

The private-sector lender also said it would form a committee to search for Kapoor’s successor.

Kapoor, one of India’s most prominent bankers, co-founded Yes Bank in 2004 and has been instrumental in making it the country’s fifth-largest private sector bank by assets. But the rapid expansion came at a cost of rising bad loans - a problem plaguing the Indian banking industry.

The lender is seeking an extension for Kapoor’s term to at least until April 30, 2019 in order to finalise results for fiscal 2019, and until Sept. 30, 2019, for its annual general meeting.

Yes Bank also sought approval to name Rajat Monga and Pralay Mondal as executive directors. They are currently serving as senior group presidents at the bank.

The bank’s shares rose as much as 5.5 percent on Tuesday, after it reaffirmed its cost guidance for FY2019, before closing down 3 percent.

Yes Bank Chief Executive and Managing Director Rana Kapoor addresses a gathering during the concluding ceremony of the Vibrant Gujarat Summit in Gandhinagar in the western Indian state of Gujarat January 12, 2015. REUTERS/Amit Dave/Files

Reporting by Tanvi Mehta and Krishna V Kurup in Bengaluru; Editing by Sai Sachin Ravikumar and Sriraj Kalluvila

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