Explained | Is RBL Bank in trouble?

On December 27, 2021, the bank’s stock plummeted, losing as much as 23% of its market cap at its lowest price during the day before closing down about 18%.

The story so far: The Reserve Bank of India (RBI) on Saturday appointed Rajeev Ahuja as the interim managing director and chief executive officer of RBL Bank while the bank’s long-time MD and CEO left the post opting for a medical leave. On Monday, the , losing as much as 23% of its market cap at its lowest price during the day before closing down about 18%.

The said that it intervened to appoint an interim CEO under Section 36AB of the Banking Regulation Act, 1949, since it “felt that the board needs closer support in regulatory / supervisory matters.” The central bank also clarified that RBL Bank is well capitalized and that it is in a satisfactory financial position. "The RBI's long-term discomfort with [RBL Bank's] asset quality risks as seen during Covid, and poor compliance with its directives could have possibly led to its swift intervention," said Anand Dama of Emkay Global. There has also been speculation that the RBI may have been unhappy with the bank's write-off of certain loans.