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RBI rap: Yes Bank denies any wrong-doing in making report public

The bank said it divulged the RBI report on bad loans to ensure information symmetry.

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Updated: Feb 19, 2019, 07.16 PM IST
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A watchman steps out of a Yes Bank branch in Mumbai
The bank "has not made any undue advantage or benefit by disseminating the UPSI".
Days after RBI pulled up Yes Bank for making a report marked 'confidential' public, the private lender put up a stout defence, saying the NPA divergence information was in due compliance.

"The bank in its assessment was of the view that the disclosure pertaining to divergence was a UPSI and required prompt dissemination to the Stock Exchanges in order to ensure compliance with Sebi (PIT) Regulations and the NSE & BSE circulars," Yes Bank said in a regulatory filing to the NSE.

The bank said it divulged the RBI report to ensure information symmetry.

"Immediately on receipt of the RAR report, to mitigate and to avoid any further speculation, misuse or leakage of the UPSI, it was decided to disseminate the information regarding "Divergence" to the stock exchanges, so as to ensure information parity, instead of withholding this information till finalization of the Annual Results," the bank further stated.

The bank "has not made any undue advantage or benefit by disseminating the UPSI. Hence, we humbly submit that the bank has not misrepresented or misled the stock exchanges/ investors in terms of Regulation 4(1)(c) of Listing Regulations".

UPSI stands for Unpublished Price Sensitive Information.

YES Bank had earlier informed stock exchanges that the RBI has not found any divergence in the asset classification and provisioning done by the lender during 2017-18.

But RBI has maintained that ‘nil’ divergence is not an achievement to be published and is only compliance with the extant Income Recognition and Asset Classification norms.

The regulator also pointed out that its Risk Assessment Report (RAR) identified several other lapses and regulatory breaches in various areas of the bank's functioning and the disclosure of just one part of the RAR is viewed as a deliberate attempt to mislead the public.

However, the RBI’s harsh view of Yes Bank’s move has confused lenders on whether it is a good practice to disclose NPA divergence, even though regulatory guidelines make it compulsory to disclose it in their notes to accounts.

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