This development comes ahead of a December 13 board meeting of the lender where the directors will evaluate a new chairman and also discuss the progress made towards the appointment of the successor to Kapoor. It is not immediately clear if the settlement between the two families will be finalised by then.
The current board strength of Yes Bank stands at seven following the resignations of Ashok Chawla, Vasant Gujarathi and Rentala Chandrashekhar. Apart from Kapoor, the others members in the board include Brahm Dutt, Lt Gen Mukesh Sabharwal, Ajai Kumar, Subhash Kalia, Pratima Sheorey and Uttam Prakash Agarwal.
If the agreement goes through, it will end a decade-old rivalry between the two promoter families which began after the tragic death of Ashok Kapur in the 26/11 attacks.
The matter reached the Bombay high court in early 2012 after Kapoor contested the eligibility of Madhu Kapur (widow of Kapur) as a promoter.
The Bombay high court had then recognised the rights of both the groups and also upheld the appointment of Kapoor as the managing director & CEO. This ruling was challenged before a division bench where the matter is pending.
The RBI has asked Yes Bank to find a successor to Kapoor by January 31, 2019.
Meanwhile, Moody’s Investors Service has downgraded Yes Bank's ratings to non-investment grade and changed its outlook to negative from stable on the back of various resignations from the board.
The sparring promoters of Yes Bank are close to hammering out a settlement that may see both sides jointly recommending the lender’s next managing director and CEO.
Sources told The Telegraph that truce talks between Rana Kapoor, who is also the managing director & CEO of the bank, and Madhu Kapur have reached a very advanced stage. However, others say discussions are still on and that a consensus is still some time away.
The buzz is that last Friday, a draft consent document that contained the broad features of the proposed resolution was seen by both the parties. While discussions are set to continue, it is understood that one of the key points in the draft proposal was that both the families will have equal rights. This apart, they will also jointly recommend the non-executive chairman and the MD & CEO of the bank.
Under the proposed agreement, each of them can appoint one non-executive director on the board of the private lender. Further, both of them can also jointly appoint another non-executive director. All these appointments will be subject to the approval of the RBI and its board. Sources said while a truce between the two parties is not far away, if reached, it could expedite the process of appointing a successor to Kapoor.
Almost a week back, Kapoor had said he was in talks with co-promoter Madhu Kapur to reach a truce. “Efforts are underway for mutual resolution with Madhu Kapur and family, the co-promoter of the bank. This is intended to ensure better support and coordination by the two promoter groups with the board of directors of the bank,” the bank had said.