The Reserve Bank of India has deferred a decision to approve another three-year term to Yes Bank’s MD and CEO Rana Kapoor, while allowing him to continue in his position till further notice. The announcement added to the speculation surrounding Kapoor’s position in the bank and consequently, the lender's shares ended 5% down on Friday. In June, Yes Bank’s shareholders had approved a fresh three-year term for Kapoor as MD & CEO. However, the central bank not only took a long time to give it’s mandatory nod, which increased speculation over his position, but, when it did, it wasn’t for the three year term that the bank was seeking. RBI's stringent take on NPA reporting Though neither the bank nor the RBI offered any explanation on the matter, media reports suggest that the sharp rise in the private sector lender’s divergences of bad loans may be the reason behind RBI’s decision. This divergence is the difference between the bad loans as assessed by the RBI and the bank. Yes Bank had reported a divergence of Rs 6,355 crore in FY17 as compared to Rs 4,176 crore in FY16, according to its most recent annual report. Market players drew parallels of this development with Axis Bank’s CEO Shikha Sharma. RBI is also said to have asked Axis Bank’s board to reconsider the decision to extend its CEO’s term for three years in the wake of rising divergence in NPA numbers. Subsequently, Sharma decided to step down effective December, 31, 2018. While the bank…
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