The Reserve Bank of India (RBI) has approved the re-appointment of Prashant Kumar as MD, CEO of YES Bank for six months effective October 6, or till a new MD, CEO takes charge, whichever is earlier, according to an exchange filing by the lender.
YES Bank did not clarify whether the lender asked only for a six months extension for Kumar. The RBI typically approves a three-year term for bank heads.
The shorter term extension comes a month after Japanese lender Sumitomo Mitsui Banking Corporation (SMBC) entered into a definitive agreement to acquire 20 per cent stake in YES Bank through a secondary stake purchase of 13.19 per cent from State Bank of India (SBI), and another 6.81 per cent stake from other bank shareholders including Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank and Kotak Mahindra Bank. SBI will sell a 13.19 per cent stake in YES Bank at ₹21.50 per equity share for ₹8,889 crore.
Kumar was first appointed as the YES Bank administrator in March 2020, after the lender’s erstwhile board was superseded by the RBI due to a “serious deterioration” in its financial position and lack of a credible revival plan.
Separately, Moody’s Ratings today upgraded YES Bank’s rating to ‘Ba2’ from ‘Ba3’ and changed the outlook on the bank to stable from positive.
“The upgrade of YES Bank’s ratings and BCA is driven by a gradual improvement in the bank’s credit profile, including its capital and loan loss reserves, which will provide sufficient buffers against the bank’s unseasoned asset risks and improving yet modest profitability and funding. YES Bank’s Ba2 deposit ratings are one notch above its ba3 BCA based on our expectation of a moderate likelihood of support from the Government of India (Baa3 stable) in times of need,” the rating agency said.