According to a report in Bloomberg, Yes Bank released findings from a Reserve Bank of India risk assessment report, saying that while the regulator found several breaches across different functions at the bank, it only found “nil divergences” in how the company assessed bad loans for the year ending in March 2018. With the company facing allegations it underreported the number of bad loans, news of the nil divergences sent the stock flying. The stock last week hit a high not seen since 2005, noted Bloomberg.
Yes Bank’s move to release information from the report raised the ire of the Reserve Bank of India, which viewed the news release as a way for the company to cherry pick information and mislead its constituents. In a letter to the Yes Bank on Feb. 15, the Reserve Bank of India said: “the disclosure of just one part of the RAR is viewed by RBI as a deliberate attempt to mislead the public.” Reserve Bank of India went on to say that Yes Bank broke rules around confidentiality and regulatory guidelines by releasing information from the risk assessment report. Those actions warned the regulator could result in the company getting hit with more regulatory actions by the Reserve Bank of India, reported Bloomberg.
Shares of Yes Bank have been under pressure ever since the bank suffered from a leadership breakdown and concerns about the loan quality. The Reserve Bank of India repeatedly rejected the bank’s bid to extend the tenure of founder and former chief executive Rana Kapoor, which pressured the bank’s stock further. The regulator found Yes Bank had underreported bad loans under Kapoor’s leadership. Kapoor’s successor Ravneet Singh Gill takes over March 1.