The 12-year tenure of Vishwavir Ahuja at RBL Bank (erstwhile Ratnakar Bank) has come to an abrupt end. Ahuja has decided to proceed on leave and the board of the bank has appointed Rajeev Ahuja, who is the executive director, as the interim MD and CEO. The 59-year-old Vishwavir Ahuja, who studied International Finance at the University of Michigan, was instrumental in transforming the old private sector bank into a fast-growing full-scale bank with a national presence. There was, however, uncertainty over his tenure as the Reserve Bank of India (RBI) had earlier approved his reappointment as CEO for a period of only one year, instead of the three-year term sought by the bank.
Also Read: RBI appoints Yogesh K Dayal as an additional director on RBL Bank's board
The bank was under the radar for higher non-performing assets (NPAs) as some of its bets in the corporate loans segment impacted its performance in the post-2018-19 period. For instance, the net profit crashed from Rs 867 crore in 2018-19 to Rs 508 crore in 2020-21. In the same period, the return on assets fell from 1.27 per cent to 0.54 per cent. The growth in loan book also stagnated from Rs 54,308 crore in 2018-19 to Rs 58,623 crore in 2020-21. The bank's share price also fell sharply from close to Rs 700-levels in June-July 2019 to around Rs 172 per share as of Friday. In the last three years, the bank has eroded shareholders' wealth in a big way.
The market was earlier giving RBL Bank a higher price to book value because of high growth in loans and profits year after year. But as growth stagnated post-2018-19, the stock became untouchable in the market. The uncertainty over the tenure of Vishwavir Ahuja also impacted its stock performance. In the past, many private sector bank CEOs like Chanda Kochhar (ICICI Bank), Shikha Sharma (Axis Bank) and Rana Kapoor (Yes Bank) had faced questions from RBI on their performance.
Kochhar, who faced allegations of misconduct, left the bank six months before her tenure was to end. Kapoor also didn't get an extension from the RBI.
Also Read: RBL Bank MD and CEO Vishwavir Ahuja goes on leave with immediate effect Vishwavir Ahuja, who was the MD and CEO of Bank of America, India from 2001 to 2009, had brought a new senior management team with foreign banking experience, mobilised capital and listed the bank on the exchanges.
He also rebranded its identity as RBL Bank from Ratnakar Bank and introduced technology to make it a new brand bank. Under Ahuja's leadership, the small-sized bank grew big time. The net profit jumped from Rs 12 crore in 2010-11 to Rs 508 crore in 2020-21.
The deposit base increased 46 times to Rs 73,121 crore, while loans and advances grew more than 50 times to Rs 58,623 crore. The bank's net worth multiplied 35 times from Rs 350 crore to over Rs 12,500 crore in 2020-21. Vishwavir Ahuja's exit adds to the growing list of new teams at private sector banks in the country. Sashidhar Jagdishan is the new MD and CEO of HDFC Bank. Sandeep Bakshi has taken charge at ICICI Bank, while Sumant Kathpalia has replaced Romesh Sobti at IndusInd bank.