RBI found large disparity in the books of Yes Bank

New Delhi sources said that the private sector lender announced the Reserve Bank has warned Yes Bank of regulatory action for revealing of nil divergence report in breach of the confidentiality clause. While Yes Bank in a press release briefly this week had said the RBI has not found any change in the asset allocation and provisioning done by the lender during 2017-18.

Moreover in a regulatory filing Friday, Yes Bank said it has got a letter from the RBI which noted that the Risk Assessment Report (RAR) was considered ‘confidential’ and it was assumed that no part of the report is disclosed except for the data in the form and manner of disclosure prescribed by regulations. The RBI said in its letter “Therefore, the press release breaches confidentiality and violates regulatory guidelines. Furthermore, NIL divergence is not an accomplishment to be published and is only agreement with the extant Income Recognition and Asset Classification norms”.

Furthermore, the RAR also knows several other lapses and regulatory breaches in various areas of the bank’s functioning and the exposure of just one part of the RAR is viewed by RBI as a deliberate attempt to mislead the public. Reportedly the RBI directed its first asset quality review (AQR) of banks in 2015 in order to find corporate loan records with critical financial weakness which were still listed as standard accounts on the books of the lenders.

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