RBL Bank Crisis: Vishwavir Ahuja Steps Down From CEO Post, AIBEA Cautions Something Wrong At RBL Bank

RBL Bank crisis

While the rest of the world was busy celebrating Christmas eve, there seemed to be some massive events happening in the RBL that indicates RBL Bank Crisis like situation . The 78 years old bank lost its existing MD and CEO. Additionally, the Reserve Bank of India appointed Yogesh Dayal as an additional director on the bank’s board.

Before the RBL Bank crisis, Yogesh K Dayal was serving as chief general manager in the communication department. The central bank also announced indefinite leave for the existing CEO and MD of RBL Vishwavir Ahuja, who hosted the CEO and MD post for the past ten years. Therefore, Rajeev Ahuja was selected as an interim CEO and MD, which is still subject to approval from the authorities.

The cause that invoked RBL Bank crisis is still uncertain, and speculations were doing the internet rounds. The association of bank employees AIBEA had also written a letter to the finance minister of India, Nirmala Sitharaman, to bring to her notice that something was not going well inside the RBL Bank. The association also expressed its fear that the RBL Bank seemed to follow the Yes Bank and Lakshmi Vilas Bank’s footsteps.

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Reason Behind RBL Bank Crisis

The exact reason why these two actions took place leading to RBL Bank crisis remains clouded. As yet, neither the bank nor the regulator has furnished any justification.

Although, at the moment, the solid backdrop of the major events leading to RBL Bank crisis is still sparse. But the actions the Reserve Bank of India took in the case of RBL and a few other banks in the past clearly shows that India’s top bank wanted to monitor the finance and governance of the RBL bank closely. Often the Reserve Bank of India places its people into the management bodies of the private banks to carry out in-depth scrutiny.

At the moment, nothing clarifies the exact cause of the RBL Bank Crisis. However, the banking industry experts speculate either the RBI found discrepancies in the regulations at the RBL Bank, or the central bank of India doubted the RBL Bank’s integrity as a result of constant malpractices in the transactions.

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The RBL Bank, in the last five years, has reported its overall advances been doubled. The bank has exceeded the mark of Rs 58,000 crores from Rs 29,000 crore back in 2017.

On the other hand, the non-performing assets and bad loans of the RBL Bank have also shown a tremendous swell. The bank’s NPA has risen to Rs 2,600 crores from Rs 357 crores in 2017.

Some reports reveal that the RBL Bank promoted retail credit, credit cards, and micro-financing. The bank is believed to have made a blunder by overlooking its financial situation.

The association of bank employees AIBEA said that it is imperative to take necessary actions to prevent the RBL’s customers from suffering as the customers of Yes Bank and Lakshmi Vilas Bank did when both the bank went into financial troubles. The AIBEA association also suggested merging RBL Bank with any public sector bank as a solution for RBL Bank crisis.

The Reserve Bank of India (RBI) had earlier this year approved RBL’s request to extend Ahuja’s resignation as CEO for a third three-year term. However, RBL Bank has been granted a one-year extension by the Reserve Bank of India, commencing on June 30, 2021.

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From 2001 through 2009, Vishwavir Ahuja served as the managing director and chief executive officer of Bank of America in India. To see this is to see that the RBI has been careful.

PM Modi Held A Meeting On The Future For Cryptocurrency In India, Investors See A Gleam Of Hope

future for cryptocurrency

On Saturday, Prime Minister Narendra Modi held a discussion on the future for cryptocurrency, which is enormously booming in India. As more Indians gravitate toward cryptocurrency investments, it was essential to have an official meeting to discuss these cryptocurrencies’ risks. The pivot of the discussion revolved around initiating progressive and forward-looking measures to ensure that rampant exposure to the cryptocurrency does not lead to terror funding and money laundering.

Until now, the central government had not taken a firm stand about the legitimacy and future for cryptocurrency in India. The finance minister Nirmala Sitharaman, during an interview to a leading news portal, had asserted that the central government was looking positively towards adopting modern blockchain technology. The central government was willing to allow a specific time frame for cryptocurrency investors to test its viability in the country.

Nirmala Sitharaman’s statement provided some relief to the native cryptocurrency enthusiasts. However, the future for cryptocurrency was still under the blanket. Prime Minister Narendra Modi’s meeting resulted from RBI Governor Shaktikant Das’ alarming statements about the cryptocurrency and threats related to them. Shaktikant Das, who was recently reappointed as the Governor Of the Reserve Bank of India, raised questions about the legitimacy of cryptocurrency. Furthermore, he alleged that cryptocurrencies are vicious allures used to catch the public interest and eventually amass billions of dollars from investments. He cited the finding of a research group that says a minimum of 7.9 percent of Indians have invested $10 billion in digital currencies, despite the fact that the figures were wildly overblown.

Why Is The Reserve Bank of India Not In The Favor Of Cryptocurrency?

The Reserve Bank of India, since the beginning, has always taken a bitter stance against the thriving cryptocurrency in India. Cryptocurrencies operate on the blockchain that uses peer-to-peer computer network spread worldwide. Being completely virtual, the Reserve Bank of India can not bring these cryptocurrencies under its control, which means there will be no authority scrutinizing the crypto transactions. This loophole can facilitate undeniable opportunities to fund unlawful activities, money laundering, and tax evasion.

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The Reserve Bank of India might have considered cryptocurrency a severe threat with no immediate solution. Thus, the top bank of India decided to impose a ban on crypto trading within the realm of India back in 2018. However, the Supreme Court of India reinstated the restrictions imposed on cryptocurrency in March 2020.

There have been proposals in India to adopt stronger laws for virtual coin transactions, arguing that an uncontrolled environment might drive more domestic savings into the asset class, putting family savings at risk.

The Reserve Bank of India is still skeptical about the future for cryptocurrency. Nevertheless, reports suggested that the reserve bank might develop its digital currency. If so, the new offering from the bank may quench the large population fascinated with virtual currencies.

Undertakings Of PM Modi Led Meeting On The Future For Cryptocurrency

According to several reports on PM Modi’s meeting on Saturday, the central government would closely scrutinize cryptocurrencies because it is developing technology and will take necessary actions.

As cryptocurrencies are gaining momentum in the country, the Centre Government is bound to draft rules and regulations to regulate the virtual currency sector. It is said that a parliamentary finance committee is looking forward to conducting a discussion with prominent crypto sector players on Monday about the viability and future for cryptocurrency.

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The purported meeting will comprise participants from leading crypto exchanges, members of the Blockchain and Crypto Assets Council (BACC), and others who are expected to attend the conference, which is scheduled to take place behind closed doors.

This urgency in dealing with the cryptocurrency issue stems from the fact that Indians are making unprecedented investments into the virtual currency market. According to statistics, Indians had approximately $6.6 billion infused in cryptocurrencies as of May this year, compared to $923 million in April 2020.

In terms of cryptocurrency adoption, India is ranked second on the Global Crypto Adoption Index. According to reports, the entire investment was expected to surpass $10 billion in the first week of November.

The participants of the PM Modi-led meeting also unanimously agreed that attempts to deceive the country’s younger generation by over-promising and non-transparent advertising should be controlled. They also decided that uncontrolled crypto markets should not be permitted to become conduits for money laundering and terror financing.

The meeting also discussed the best practices to mold the unregulated cryptocurrency into a controlled and safe environment. The central government may submit a crypto law to the cabinet for consideration.

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The Reserve Bank of India Imposes Rs.1 Crore penalty on the State Bank of India.

The Reserve Bank of India slapped Rs.1 Crore as a fine on the state bank of India as a results of failing to comply with the fraud classification rules.

An investigation on the accounts maintained with SBI by the regulators found it to be deficient in reporting frauds.

“A scrutiny was administered by the RBI during a customer account maintained with the bank and therefore the examination of the scrutiny report and every one related correspondence concerning an equivalent , revealed non-compliance with the aforesaid directions to the extent of delay in reporting of fraud within the said account to RBI,” the regulator said during a statement.

A notice was issued to the lender advising it to show why penalty shouldn’t be assessed on it for similar non-compliance with the said directions.

“Considering the reply of the state bank of india, the oral submissions and notice made by the bank in the personal hearing, RBI made a conclusion that the charge of non-compliance with the foresaid Directions of RBI was warrented and substantiated imposition of monetary penalty”, the regulator said.