Yes Bank News - Yes Bank shares down to the lowest in a decade as RBI takes cont
Posted by B2B on March 6th, 2020
Mumbai: It is likely that the actions of private lenders YES BankNSE -58.42% opened a sharp decline on Friday after the Reserve Bank of India dissolved the board and imposed a one-month ban.
The central bank promised to reach a credible restructuring plan in the coming days that could include the merger with another lender. The RBI also assured the bank depositors that their interests would be fully protected.
The RBI application became effective as of 6 pm Thursday and the suspension will remain in effect until April 3.
The shares will collapse on Friday morning. Ambareesh Baliga, an independent market analyst, said that any bank that shows signs of problems would see deposits escape.
According to the notification from the Reserve Bank of India (RBI), the bank cannot pay depositors more than Rs 50,000 during the stay.
"The step is to break down the risk to depositors," said Ajay Bodke, CEO of PMS. " They are likely to have to reconcile with a serious erosion of value." Prabhudas Lilladher.
The Reserve Bank of India said in a notification that the financial position of YES Bank has suffered a steady decline largely due to the bank's inability to raise capital.
“The bank has also experienced serious problems and governance practices in recent years, which has led to a constant decline in the bank.
The central bank said the bank's administration had made it clear to the central bank that it was in talks with several investors and that it would probably succeed. The bank was also working with some private equity firms to explore opportunities to pump capital according to the presentation on the stock exchange on February 12.
After taking these developments into account, the Reserve Bank concluded that, in the absence of a reliable plan, and for the public interest and interest of depositors in the bank, it had no alternative but to request to the central government that imposes it and the central bank said: "There is an optional moratorium under Article 45 of the Banking Regulation Act of 1949".
Earlier in the day, ET NOW reported that SBI and LIC were created to capture 49 percent of YES Bank's shares by obtaining preferred shares in the private lender at 2 rupees per share. The report added that the two state companies will receive a share of Rs 490 crore. The SBI will probably receive an open offer exemption
Meanwhile, JPMorgan lowered its target price at YES Bank on Thursday to Re 1.
"We believe that forced rescue investors probably want the bank to be acquired at a value close to zero to calculate the risks associated with the stress book and the possible loss of deposits," a JPMorgan analyst said in a note Stock.
At the same time, it was not possible to reach the net banking facilities of YES Bank on Thursday night. The lender attributed this to heavy traffic on his website.
Read More : https://business2business.co.in/article/2176/yes-bank-news-yes-bank-shares-down-to-the-lowest-in-a-decade-as-rbi-takes-controlAlso See: Yes Bank, Reserve Bank, Central Bank, Shares Down, Yes, Bank, Shares
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