YES Bank slips 8% after RBI rejects request to extend Rana Kapoor's term

Shares of YES Bank dropped as much as 8 per cent in the intra-day trade on Friday after the Reserve Bank of India (RBI) on Wednesday once again rejected the lender’s request for extending the term of MD & CEO Rana Kapoor, and reaffirmed the February deadline for finding his successor.

The RBI said that a successor to Kapoor should be appointed by February 1, 2019. Kapoor’s tenure was cut short by an order issued by the RBI recently. Kapoor will be in office till January 31, 2019. READ MORE

Business Standard had earlier reported that the bank plans to submit MD & CEO candidates by December 15. “The bank's appointed committee is targeting to complete this recruitment process latest by mid-December 2018,” confirmed the bank’s filing on Wednesday.

Meanwhile, the stock also took a beating after reports surfaced the lender has exposure to the real estate developer Supertech. Supertech has been downgraded to junk status by the ratings agency Brickwork citing failure to service debt. However, YES Bank clarified to TV channels that it has zero exposure to the company and that the market rumors are incorrect.

The bank has hired US-based advisory firm Korn Ferry to help with the selection process. A committee has been set up with three internal and two external members to search for suitable candidates. Korn Ferry will assist the committee in making recommendations to the board within the stipulated timeline, said the bank.

Shares of the bank have been under pressure ever since the RBI trimmed Rana Kapoor's term as Yes Bank CEO in September till 31 January 2019. In the past one month, the stock has fallen 37 per cent as of September 17. 

The stock eventually settled at Rs 218 apiece on BSE, down 6 per cent.