INSUBCONTINENT EXCLUSIVE:
Yes Bank breached confidentiality rules and violated regulatory guidelines, the RBI saidYes Bank Ltd
fell after the Reserve Bank of India (RBI) reprimanded it for selectively revealing a "confidential" report by the regulator that led to a
30 percent surge in the lender's shares Thursday
The regulator called the disclosure a "deliberate attempt" to mislead the public.The risk assessment report on Yes Bank prepared by the RBI
identified several lapses and regulatory breaches in various areas of functioning, the company said in a stock exchange filing on Friday,
citing a letter from the regulator
But a Yes Bank statement on Wednesday had only said the audit found "nil divergences" in an assessment of bad loans for the year to March
2018, which led its shares to jump the most since 2005 the next day."Nil divergence is not an achievement to be published and is only
compliance with the extant income recognition and asset classification norms," the RBI said in the letter to Yes dated Feb
"The disclosure of just one part of the RAR is viewed by RBI as a deliberate attempt to mislead the public."Shares of the bank fell more
than 8 percent before paring the losses to 4.6 percent, to trade at Rs 208.95, at 9:34 a.m
Yes Bank was the worst performer on 10-member Bankex index, which was little changed.Yes Bank's announcement last week that RBI's audit
didn't find any divergence in soured debt came as a relief for investors after the lender revised bad-loan figures for the fiscal year 2017
marking them four times higher than those previously reported
Following the audit, the central bank twice rejected the lender's request to extend co-founder and former Chief Executive Officer Rana
Mr Kapoor's successor Ravneet Singh Gill, who has been heading Deutsche Bank's India franchise, will take over from March 1."There will
be some question marks but the key is divergence, the market is focused on financials," said Hatim K Broachwala, an analyst at IDBI Capital
"Non-compliance at most could lead to a penalty in the range of 10-20 million rupees (Rs 1-2 crore), which for a bank of Yes Bank's size
is not much."In 2017, the RBI ordered lenders to come clean in exchange filings if the difference between the soured credit reported in
their results and as assessed in subsequent central bank reviews amounted to more than 15 percent
Yes Bank stood out from its peers in the wake of the RBI's stricter disclosure standards for bad loans introduced in April 2017.While Yes
Bank reported a discrepancy of more than 300 percent in 2017, the difference for Axis Bank Ltd
State Bank of India showed soured debt was about Rs 23,200 crore ($3.3 billion) higher than what the state-run lender reported for the end
of March 2017.Yes Bank also breached confidentiality rules and violated regulatory guidelines by releasing the information from the risk
assessment report, and this could entail further regulatory actions, the RBI said on Friday.
