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Rbl Bank shares gain after Monday’s crash;  here’s why

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Rbl Bank shares gain after Monday’s crash; here’s why

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RBL Bank shares rose as much as 4% on Tuesday following lower-level purchases and the lender’s agreement with Bajaj Finance to extend the co-branded credit card partnership. The stock, however, quickly reduced most of the initial gains.

RBL Bank shares were trading up 0.3% at Rs 141.25 on BSE, as of 9:24 am. The gain comes after two consecutive days of falling. Since the start of the year, the stock is down 38%.

The lender’s agreement with Bajaj Finance extends their co-branded credit card partnership for 5 years.

The stock fell sharply on Monday as negative developments – Vishwavir Ahuja quit as Managing Director and CEO and RBI appointing Managing Director Yogesh K Dayal as additional director on RBL Bank board – and a grim Brokerage commentary weighed on investor sentiment. The stock fell more than 23% on Monday.

The brokers said that the central bank’s appointment of an additional director to the RBL Bank board was negative and that in the past such RBI action has usually taken place when banks are in trouble.

CLSA said the move would lead to near-term uncertainty, as ICICI Securities downgraded its rating on the bank stock to be “sell” to “hold”, given the looming uncertainty.

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Antique Stock Broking said current development raises the risk of the unknown.

“However, the rationale for these unexpected developments is not very clear to us and could undermine investor confidence and lead to a price correction and short-term underperformance,” Antique Stock Broking said in a research note. .

Even though the bank’s management has stressed that RBI’s appointment of the independent director is not due to asset or liability issues, analysts are skeptical about it.

Edelweiss Broking believes the transition to a new CEO could likely change the bank’s growth trajectory and asset mix.

Rbl Bank shares gain after Monday’s crash; here’s why

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