December 13, 2018 / 10:09 AM / 8 months ago

India's Yes Bank says on track to find CEO within RBI deadline

The logo of Yes Bank is pictured on the facade of its headquarters in Mumbai, India January 17, 2018. Picture taken January 17, 2018. REUTERS/Danish Siddiqui

(Reuters) - India’s Yes Bank Ltd (YESB.NS) said it was on track to find a new chief executive officer within the central bank’s Feb. 1 deadline, but the lender’s shares fell sharply as the market was expecting some clarity at its board meeting on Thursday.

The bank now plans to submit the final recommendation for the CEO post to the Reserve Bank of India (RBI) after the next board meeting on Jan. 9, India's fifth largest private-sector lender by assets said in a statement here

Yes Bank shares, which rose as much as 3.5 percent earlier in the session, reversed course to close 6.4 percent lower.

“People were expecting an MD & CEO appointment from this meeting, but that has been deferred to the Jan. 9 meeting, so that is a major disappointment,” said Asutosh Mishra, head of research of institutional equity at Ashika Stock Broking Ltd.

The RBI in October refused - for a second time - to give incumbent CEO Rana Kapoor an extension to his term, prompting a flurry of departures from the bank’s board. The bank has also seen its stock nearly halving in value since the RBI first cut short Kapoor’s term in September.

“Markets were at least expecting the bank to give a list of suggested names to the RBI but that has not materialized, so this is disappointing,” Mishra added.

The bank said it had finalised its recommendation for the role of a non-executive part-time chairman, which has been vacant since Ashok Chawla resigned in November, and that it would “promptly” seek approval from the RBI.

Reporting by Chris Thomas in Bengaluru, additional reporting by Chandini Monnappa; Editing by Sherry Jacob-Phillips and Gopakumar Warrier

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