Year of reckoning for India Inc: YES Bank saw 4 board-level exits in 2018

Private lender Yes Bank saw a stormy year starting with the Reserve Bank of India (RBI) cutting short Rana Kapoor’s three-year term in September. He will be in office till January 31,2019. The bank’s request for extending Kapoor’s term till April 2019 was turned down by the RBI in October. The bank has seen four board-level exits in the past few months. R Chandrashekhar resigned due to discontent over the bank’s internal processes, contradicting the bank’s statement that Chandrashekhar left for ‘personal reasons’. Former State Bank of India chairman O P Bhatt resigned from YES Bank’s search committee citing ‘conflict of interest’. Independent director Vasant Gujarathi also stepped down. The bank’s chairman Ashok Chawla resigned in November stating that the transition period will require more involvement. The post has been vacant since then and the bank decided its final recommendation for chairman in mid-December and will soon send it to RBI for approval.

The bank had planned to complete the recruitment process of the successor by mid-December, however the timeline was shifted and the final list of candidates for MD & CEO will be submitted to the RBI by the bank after its board meeting on January 9, 2018.

Rating agencies Moody’s and ICRA downgraded the bank’s instruments in November, saying that the resignation of various board members raise concerns over corporate governance.

The bank’s two promoter groups, led by co-promoters Rana Kapoor and Madhu Kapur, have been in active discussion since YES Bank’s request for extending Kapoor’s term was rejected. However, there is still no clarity on the timeline for peace between the two groups.