Governance lapses, poor compliance led RBI to trim Rana Kapoor’s term: Sources

The RBI has cited serious lapses in governance and a poor compliance culture at Yes Bank as reasons for its regulatory discomfort in allowing Rana Kapoor to head the private sector lender, sources said, citing a communication from the central bank. Asking the Yes Bank board to appoint a successor to Kapoor latest by February 1, 2019, the RBI in its letter dated September 17 to the lender’s then chairman Ashok Chawla also said the bank has displayed highly irregular credit management practices Sources close to the bank, however, said several of the concerns raised by the RBI have already been addressed and the same were reflected in its communication. They also claimed that the bank has complied with all corrective actions sought by the RBI, most of them having been done before the September 17 missive. The central bank said these happenings reinforce its grave concern and regulatory discomfort with the role of the incumbent MD & CEO in the governance, management and superintendence of the affairs of the Yes Bank. The corrective measures were initiated after persistent governance and compliance failure reflected by bank’s highly irregular credit management practices, serious deficiencies in governance and a poor compliance culture, the central bank said.

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