Financials

Report by Hemindra Hazari

Sintex loan fiasco - is RBL’s acting CEO fit to be a banker, let alone run a bank? Approving a loan to a company which has a debt-equity of 10.5:1 and was already overdue on a loan to Deutsche Bank was either a case of extreme incompetence or ‘evergreening’. It also reflects extremely poorly on the independent directors in the credit and risk committees. The regulator must now investigate any other poor quality loans disbursed by the bank. A major implication of this story is that it is unlikely that interim CEO, Rajeev Ahuja, will be selected as permanent CEO; while an external appointment may disrupt the continuity the market was expecting.