RBI said that Yes Bank’s selective disclosures from an audit report by the RBI was a ‘deliberate attempt’ to mislead the public.
Mumbai/Singapore: Yes Bank Ltd. came under fire from the Reserve Bank of India, which said its selective disclosures from an audit report by the regulator was 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. A Yes Bank statement on Wednesday said the audit found “nil divergences” in an assessment of bad loans for the year to March 2018, which led its shares to surge 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. 15. “The disclosure of just one part of the RAR is viewed by RBI as a deliberate attempt to mislead the public.”
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.
Yes Bank is trying to emerge from a leadership crisis that triggered a plunge in the share price last year. India’s central bank twice rejected the lender’s request to extend founder and former CEO Rana Kapoor’s tenure after saying the bank repeatedly under-reported bad loans. Kapoor’s successor Ravneet Singh Gill, who has been heading Deutsche Bank’s India franchise, will take over from March 1. -Bloomberg
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