Chennai: The Reserve Bank of India has come down hard on Yes Bank after the latter stated, publicly, that the RBI did not find any divergence in its non-performing asset recognition for 2017-18.
The RBI, in what can be classified as a first-of-its-kind rebuke, told Yes Bank that the risk assessment report was intended to a be a “confidential”‘ document and that disclosures made by the lender was viewed by the regulator as a “deliberate attempt to mislead”.
Yes Bank received a letter from the RBI, which states, “As the RAR report was marked “confidential”, it was expected that no part of the report and information contained therein be divulged except for the information in the form and manner of disclosure prescribed by Regulations. Therefore, the Press Release breaches confidentiality and violates regulatory guidelines.”
On Thursday, Yes Bank informed stock exchanges that the RBI has found no divergence in bad loan divergence in FY18. The stock surged and analysts opined that the worst is over for Yes Bank.
The all-clear report from the RBI had come after two years of divergence in bad loan reporting. In FY16, after its first assessment, the RBI found Yes Bank’s divergence of bad loans at Rs 4,176.70 crore much higher the reported gross NPA of Rs 748.9 crore during the period.
Again, in FY17, the central bank found the private lender’s divergence at Rs 6,355 crore, or three times the reported bad loan amount. Yes Bank reported gross NPAs at Rs 2,018 crore in FY17, lower than Rs 8,373.8 crore.
According to RBI guidelines, banks have to disclose divergences if the additional provisioning requirements assessed by the RBI exceed 15 per cent of the net profits after tax and/or additional gross NPAs identified by the RBI exceed 15 per cent of the incremental gross NPAs for the reference period, or both.
For FY18, Yes Bank said that no divergences in bad loan classification had been found.