RBL Bank shares plunged 10% on Thursday to hit a fresh 52-week low after reports surfaced that the bank wrote-off loans worth Rs 300 crore within seven months of the loans being sanctioned. At 2:30, the stock was trading at Rs 132.70, down Rs 11.60, or 8.04 percent. It touched a 52-week low of Rs 130.50 earlier in the day. Today’s price crash comes after a media report claimed that the main reason for RBI’s sudden intervention in RBL Bank was a Rs 300-crore loan that was written off within seven months of being sanctioned. So far this week, RBL Bank shares have tanked about 26 percent.
RBL Bank stock is under ban for trade today under the futures and options (F&O) segment by the National Stock Exchange (NSE). It has been part of the banned list in the past few sessions. Domestic brokerage house Motilal Oswal in its latest report said that the current developments have raised concerns about RBL Bank’s ability to sustain a turnaround in its operating performance, while at the same time raising worries of similar actions by the regulator on other mid-sized banks, where the operating performance has been sub-optimal.
However, RBL Bank allayed customers’ fears earlier this week saying these developments are not on account of any concern on advances, asset quality and deposits level of the bank. Even RBI stepped in to address the concerns of depositors and shareholders, saying the private lender’s financial health remains stable, and there is no reason for depositors and other stakeholders to react to speculative reports.
RBL Bank stock has been under pressure ever since Vishawvir Ahuja stepped down as MD & CEO and the Reserve Bank of India named Yogesh Dayal as an additional director. The stock price tumbled further after a report by Edelweiss Securities said that the private sector lender may get excluded from the Nifty Bank index in the National Stock Exchange’s upcoming review due in March 2022.
ICICI Securities has downgraded the stock to “sell”, and lowered its target price to Rs 131 from Rs 181 on the back of looming uncertainty. Meanwhile, RBL Bank informed earlier today that the RBI has approved the appointment of Rajeev Ahuja as Interim Managing Director and CEO of the bank for a period of three months with effect from December 25, or till the appointment of a regular MD and CEO, whichever is earlier.