Is RBL bank Scam Going to become YES bank Scam 2022
RBL Bank’s share price has gone down by more than 15%. It has come close to Rs 818. While at the time of Christmas festivities, when all the bank operations are closed.
Before some month ago the share price of RBL bank is more than 1200rs.
On the same day, the RBI appointed an additional director at RBL Bank. And whenever RBI appoints an additional director in any bank, the shareholders tend to lose their sleep.
Something of this type, in this weekend, RBL Bank’s shareholders had to face. In this matter, neither the RBL Bank has given any details nor the RBI has made any comments.
Although the RBL bank arranged a meeting yesterday evening, But in that too, they have not disclosed anything significant.
However in today’s article, We are going to give you some inside details. Which will make all the things clear for you. Also, a big news broke out yesterday. That Mr Radhakishan Damani and Rakesh Jhunjhunwala want to buy 10% stakes in the company.
With that, the RBL Bank investors who were feeling unsettled they have somewhere felt a wave of happiness. About all things, we are going to discuss in this article. And let’s understand the RBL Bank’s mystery story in detail.
Two things which are trending in the last two days and everybody knows about them. Which is that the company’s CEO and MD Vishwavir Ahuja has immediately gone on leave. And the RBI also has appointed an additional director here.
But here, in between the lines, there are a few things, Which we all need to understand. So the story begins in the year 2010. When Mr Vishwavir Ahuja became the CEO of the RBL Bank. He saw that there is a big problem here.
The problem is that the loan book of the bank is very concentrated. Only in the real estate sector, the company has given maximum loans. He even observed that the real estate sector is struggling a lot. If we do not diversify the loan book now, then in the long run, it can create a very big problem.
Understanding this issue, he took 47% of real estate sector and reduced it to less than 15%. It enabled the financial health of the bank to slowly get better.
After solving this huge problem of the bank, Mr Ahuja’s eyes were now fixed on creating growth for the bank. that how can we quickly create more growth for the bank. And hence he focused on the retail loan book.
He quickly wanted the retail loan book, which means the loans that are given to the common people, he wanted to increase that. And then the bank’s retail loan book slowly increased to Rs 30000 Crore.
But to tell you the truth, for this growth, Mr Ahuja took one more thing, which was a very big risk. In the retail loan book, he focused on the unsecured loans. We have seen before that in the Yes Bank’s case also, some similar decisions were made.
For targeting growth, a lot of unsecured loans were given. The maximum loans which are given, are in the form of Credit cards. which are unsecured loans. Meaning there is no guarantee backing these loans.
On 30th September 2021, the RBL retail loan book was Rs 30,784 Crore. Out of which 65% loans are unsecured, that is they are risky.
Let me make this simple for you and we will check the same figures for HDFC Bank. In HDFC Bank, the retail loan book is of Rs 4.94 lac crore.
Out of which, how much percentage should be the unsecured loans? You tell me. 40%, 20% or 10%? It is just 3%.
These figures clearly state that the RBL bank, is taking too much risk for chasing growth. One more industry is growing rapidly in India Which is Crypto Industry.
From the year 2011-2021, ever since Mr Vishwavir Ahuja became the CEO of the bank, from that time till now, company’s yearly compounded revenue has grown by 46%.
The growth is clearly visible. The profits have also grown by a compounded yearly rate of 45%. But the company’s share price has dropped by compounded yearly 10%.
Then of course the question arises that why so? For that, we need to check the company’s asset quality.
from the year 2018 to 2021, the company’s gross NPA has increased very rapidly. In December 2018, it was just 1.38% , Growingly rapidly from there, by September 2021 it has become 5.4% and this level is a very risky level.
Let first know what is NPA
NPA means non perfoming assets which means debtors are not paying interest and their loans.
Talking about net NPA, that too is growing very fast here. The bank’s net NPA in December 2018 was very less. Just 0.72%. From there, it has picked up very quickly, by September 2021 it has become 2.14% When you are analysing any bank, focus that the net NPA is less than 1%.
In this case, it has gone to 2.14%. With that, it can be known that the risk of the loan is very high.
D. Muthukrishnan, who is very active on Twitter. He keeps on telling the investors that the doing a bank business is very simple giving away loans is very easy, Increasing the loan book is very easy. But the difficult part is the collection of those loans and this is indeed the biggest challenge.
So do not get impressed when any bank’s loan book increases and if you see some growth there. Along with that, also check out the NPA.
Before this, the RBI, Dhan Lakshmi Bank, Lakshmi Vilas Bank, Yes Bank. Appointed additional directors in these banks.
And later on, we all know what happened with those banks. But here, the most shocking thing is that the RBI has not yet revealed.
that why did it appoint the additional director. They have not given any clarity on this matter. And this thing is proving to be costly for the shareholders.
Because the RBL Bank shareholders do not have any clarity on this. The Bank’s share price is falling and they just do not know what actions to take further. Also, there were some rumours that Mr Jhunjhunwala and Mr Damani, are going to purchase 10% stakes in the bank.
But just today morning, when Mr Jhunjhunwala was being interviewed, he said that this news is completely fake. So whenever any such news comes, please cross verify them as well.
So before arriving at the conclusion, I want to give you a disclosure that even I have my personal investments in the RBL bank. But in this article, we have avoided all such biases whatever is right is right and whatever is wrong is mentioned as wrong.
we always consider things this way. Even when we have our own shareholdings in that company. I am going to disclose a very important thing in the conclusion.
which we have gained through experience in the previous years, which is that whenever there is any such situation, immediately after the share prices fall, people go to buy those shares.
Do not commit this mistake. In the Yes Bank’s case, when the share price fell from Rs 300 to Rs 150, people immediately started buying those shares. Assuming that the share price has fallen by 50%.
But what followed later was even more dangerous. afterwards, the share price dropped from Rs 150 to Rs 10.
The shareholders who entered at Rs 150 they had to bear huge losses. So, like we have discussed that there hasn’t been any clarity until now.
So, till the point everything becomes clear, till then, do not be in a hurry. Because when you are a shareholder of any bank or a company, it is necessary for you to understand each and everything. And based on that, you have to make the decisions. So what is your view about the RBL bank? Please let us know through your comments.
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