INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Shares of YES Bank dropped over 8 per cent after the Reserve Bank of India (RBI) warned the lender of regulatory action for
disclosure of nil divergence report in violation of the confidentiality clause.
The scrip fell 8.08 per cent to hit a low of Rs 201 on
BSE.
Earlier this week, YES Bank had informed stock exchanges that the RBI has not found any divergence in the asset classification and
with the extant Income Recognition and Asset Classification norms.
The regulator also pointed out that its Risk Assessment Report (RAR)
identified 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.
Jefferies in a note pointed out that while Risk Assessment Report is always
marked 'confidential', over the past two years, the NPL divergence mentioned in RAR across banks has been one of the most sought-after
to the investment community, irrespective of whether the divergence was reportable or not, or 'nil' - in varied ways, viz
quarterly earnings releases, press briefings, analyst calls etc
Assuming none of these are/were in breach of confidentiality (at least we haven't heard anything from RBI publicly), we don't think YES's
term by alluding to lapses and regulatory breaches, despite supplying a clean chit on NPL divergence
YES could face penalties (it remains to be seen what form these might take), but we do not view its disclosure as out of line with peers
