Yes Bank Loses $3.1 Billion In Market Value After RBI Trims CEO Rana Kapoor's Term

Yes Bank Ltd's shares tumbled nearly a third on Friday, wiping as much as $3.1 billion off its market value. The shares of the private sector bank settled at Rs 257.05 on the BSE, down 28.71 per cent on Friday. Shares of Yes Bank plunged as much as 34 per cent in intraday trade today. The sharp losses in Yes Bank shares came after the Reserve Bank of India (RBI) asked the private sector bank's managing director and CEO Rana Kapoor to step down after an extended term till January 31, 2019.

Yes Bank informed the BSE in a filing post-market hours on Wednesday that the RBI had curtailed the term of Rana Kapoor till January 31, 2019, and asked the board to find a replacement. The 61-year-old Mr Kapoor owns an over 10 per cent in the bank. Private sector bank chiefs are allowed to continue holding their posts till the age of 70. 

In August, the bank board had given a three-year extension to Mr Kapoor and sought the central bank's approval for the same. The bank had been found to have under-reported non-performing assets (NPAs) by over Rs 10,000 crore for two consecutive years, reported Press Trust of India (PTI).

Rating agency Moody's on Thursday maintained its outlook on Yes Bank shares as stable. Moody's said Yes Bank will continue to outpace the industry in loan book growth, but added that while the capital buffers are adequate for now, it will have to raise capital from the market soon.

Some analysts say uncertainty has been already factored in Yes Bank's stock price. "Since the August extension to Mr Kapoor's term by RBI, Yes Bank shares declined 12 per cent till September 19.Any level below the intraday low on Friday can be an attractive bet for a long-term investor", said AK Prabhakar, head of research at IDBI Capital Markets.

In addition to this, Yes Bank has paid Rs 38 crore in fines to the GST (Goods and Services Tax) department for alleged violations in domestic remittances, officials were quoted as saying in a report by news agency Indo-Asian News Service. The issue relates to remittances by migrants from urban pockets to their homes in rural areas. The tax department feels the bank has violated norms and under-paid the tax, while the bank feels the opposite.

Meanwhile, benchmark equity indices closed on a negative note on Friday. BSE benchmark index Sensex slipped 279.62 points or 0.75 per cent to close at 36,841.60. The broader NSE Nifty declined 91.25 points or 0.81 % to settle at 11,143.10.

(With agencies inputs)