The Reserve Bank of India appointed an additional director on the board of private sector lender RBL Bank Ltd, while the bank's longtime managing director and CEO Vishwavir Ahuja stepped aside and proceeded on leave.

According to the Banking Regulation Act, the RBI has the power to appoint an additional director if it forms an opinion that such an action is necessary in the interest of the bank or in its depositors.

The Act also empowers the RBI to remove any managerial persons from office if it is satisfied that it needs to take action in public interest or to prevent the affairs of the bank from being conducted in a manner that is detrimental to the interests of the depositors or to secure proper management of the bank.

It is, however, not clear if Ahuja's decision to step aside and proceed on leave was at the prodding of the RBI. The bank's board had decided to extend Ahuja's tenure by three years from June 2021, but the RBI gave its approval for extension of his tenure only for a year. Ahuja is the MD and CEO of the bank since 2010.

 The bank's board on Christmas day accepted Vishwavir Ahuja's request to proceed on leave and appointed its executive director Rajeev Ahuja as the interim MD & CEO of the bank with immediate effect, subject to the regulatory and other approvals.

The bank in an announcement on the stock exchanges said the RBI has appointed Yogesh Dayal as the additional director for a period of two years starting December 24, 2021, or till further notice.

The announcement clarified that the bank's business and financial trajectory continues to be on improving trend, post absorbing the challenges due to Covid-19 pandemic. It said the financials of the bank remain robust with healthy capital adequacy of 16.3%, high levels of liquidity with a liquidity coverage ratio of 155 %, stable net non-performing asset (NPA) of 2.14%, credit-deposit ratio of 74.1 % and leverage ratio of 10%, as on September 30, 2021.