Kapoor was among the founding team of Yes Bank, along with Ashok Kapur who died in 2008.
Private sector lender Yes Bank on Thursday said it has received RBI's approval for the continuance of Rana Kapoor as managing director and CEO of the bank till further notice from the central bank.
In June this year, Yes Bank's shareholders had approved the re-appointment of Rana Kapoor as the chief executive and managing director for three years, subject to final approval from the Reserve Bank of India.
"We wish to inform you that the Bank has received the RBI's approval that Rana Kapoor may continue as Managing Director & CEO of YES Bank till further notice from RBI," the bank said in a regulatory filing.
Shares of the bank had slid in the past few sessions amid pending approval from RBI on Kapoor's re-appointment.
The stock declined 1.12 per cent to close at Rs 361.90 on BSE on Thursday.
Putting speculation to the rest, RBI approved the reappointment of Rana Kapoor as MD and CEO of Yes Bank but did not specify the period.
The Bank had sought permission from the RBI for the reappointment of Kapoor for a period of three years starting September 2018 onward.
Earlier this year, RBI denied a three-year extension to Axis Bank CEO Shikha Sharma despite board endorsing her reappointment.
Kapoor was among the founding team of Yes Bank, along with Ashok Kapur who died in 2008.
As a promoter, Kapoor and his family own a 10.66 per cent stake in the bank. He has been the bank's CEO since 2004.
The banking sector has seen increased regulatory scrutiny over the last two years as the RBI has tried to push for appropriate recognition of bad loans.
The asset quality review initiated in December 2015 has led to an increase in bad loans over Rs 6 lakh crore across banks, including Yes Bank.
Banks were asked to disclose ‘divergences' in bad loan reporting. As a result, the RBI judged gross NPAs at Rs 8,373.8 crore for Yes Bank for 2016-17 against declared gross NPAs at Rs 2,018 crore.
Thus, there was a divergence of Rs 6,355 crore or three times the reported amount.
Photograph: Cathal McNaughton/Reuters
