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RBI censures Yes Bank for revealing confidential report

Yes Bank - Credit Bloomberg

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The risk assessment report on Yes Bank prepared by the Reserve Bank of India (RBI) identified several lapses and regulatory breaches in various areas of functioning.

Monday 18, February 2019

(Bloomberg) --India’s central bank reprimanded Yes Bank for selectively revealing a confidential report by the regulator that led to a 30 per cent surge in the lender’s shares -- calling the disclosure a ‘deliberate attempt’ to mislead the public.

In a statement, Yes Bank statement stated that 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.

In a letter to Yes Bank, RBI said, “Nil divergence is not an achievement to be published and is only compliance with the extant income recognition and asset classification norms.” The disclosure of just one part of the RAR is viewed by RBI as a deliberate attempt to mislead the public.

Yes Bank’s announcement last week that RBI’s audit did not 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, India’s central bank twice rejected the lender’s request to extend co-founder and former Chief Executive Officer Rana Kapoor’s tenure.

TAGS : Yes Bank, Reserve Bank of India

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