Shares of India’s major private sector lender Yes Bank tanked in trade on Monday morning, after the RBI pulled up the bank for disclosing “confidential” information. Yes Bank share price slumped by more than 8.2% intra-day to Rs 201 in the morning trade on Monday. “As the RAR report was marked “confidential”, it was expected that no part of the report and information contained therein be divulged except for the information in the form and manner of disclosure prescribed by Regulations. Therefore, the Press Release breaches confidentiality and violates regulatory guidelines,” RBI said in a letter to Yes Bank, according to a stock exchange filing by the lender. Later, the stock recovered some of the lost ground and closed at 2.54% down at Rs 213.15.
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Notably, the central bank has also said that NIL divergence is not an achievement to be published and is only compliance with the extant Income Recognition and Asset Classification norms. Further, the central bank noted that the RAR (Risk Assessment Report) also identifies several other lapses and regulatory breaches in various areas of the Bank’s functioning and the disclosure of just one part of the RAR is viewed as a deliberate attempt to mislead the public.
On Friday, Yes Bank shares closed 31% higher at Rs 221 on BSE after the firm said that the RBI has not found any divergence in the asset classification and provisioning done during 2017-18. Taking stock of the development, global research firm firm Nomura said that the Risk Assessment Report from RBI is positive and could lead to a near term re-rating. Nomura has a “neutral” rating for the bank with the target stock price at Rs 245 per share. Research and brokerage firm Motilal Oswal said RBI’s report has removed challenges that the new management might otherwise have had to align the bank’s asset quality standards to RBI’s requirements.