Investors clobbered the RBL Bank stock on Monday amid deepening concerns over the bank’s affairs which the Reserve Bank of India failed to soothe with a rare statement in which it expressed confidence in the existing management and the bank’s financial position.

The dramatic developments at RBL Bank erupted last Saturday when the RBI appointed its chief general manager Yogesh Dayal as an additional director on the board of the bank — a very unusual move that suggested the regulator was unhappy with the bank’s working and wanted to enhance its oversight. The appointment led to the sudden exit of CEOand MD Vishwavir Ahuja — who had apparently gone on sought medical leave — and the appointment of Rajeev Ahuja as the interim chief.

Nervous investors started dumping the stock from the start of trading which sent the stock plunging 25 per cent in intra-day trades. The stock clawed back some of the losses after the RBI statement but it could not shake off the bear attack and closed at Rs 140.90, a fall of 18.3 per cent from Friday’s close.

At one stage, the stock had dipped to an intra-day low of Rs 132.35. Around 96 lakh shares were traded in a frenetic session, way above the two-week average of 4.20 lakh.

At a press conference on Sunday, the bank indicated the resignation of Ahuja who has been with RBL for more than a decade was only coincidental.

With the RBL stock taking a beating on the bourses amid apprehensions over the appointment of Dayal, the RBI issued a rare statement.

“The Reserve Bank would like to state that the bank is well capitalised and the financial position of the bank remains satisfactory. As per half yearly audited results as on September 30, 2021, the bank has maintained a comfortable Capital Adequacy Ratio (CRAR) of 16.33 per cent and Provision Coverage Ratio (PCR) of 76.6 per cent. The Liquidity Coverage Ratio (LCR) of the bank is 153 per cent as on December 24, 2021 against the regulatory requirement of 100 per cent,’’ the RBI said.

RBI said the appointment of an additional director in private banks is undertaken under Section 36AB of the Banking Regulation Act, 1949 as and when it is felt that the board needs closer support in regulatory or supervisory matters.

“As such, there is no need for depositors and other stakeholders to react to the speculative reports. The bank’s financial health remains stable.’’

“RBI’s similar action at other banks in the past has hinted at compliance or asset quality or governance or business risk issues. Repercussion of this move on various stakeholders, including depositors and employees, and consequent derailment of confidence and disruption would be key monitorable going forward,’’ a note from ICICI Securities said.

A note from Emkay said the RBL management did not provide satisfactory reasons for the appointment of RBI's Dayal and the sudden management rejig.

Volatile markets

After rebounding over 960 points from the day’s low , the 30-share Sensex settled 295.93 points or 0.52 per cent higher at 57420.24. As many as 24 Sensex stocks closed in the green while six declined.

The broad-based Nifty of the National Stock Exchange recovered 82.50 points or 0.49 per cent to close at 17086.25 with 40 of its constituents advancing.

Rising for the eighth straight session, the rupee on Monday appreciated 3 paise to nearly four-week high of 75 against the dollar amid a firm trend in domestic equities and rising appetite for riskier assets.