Yes Bank faces RBI penalty for violating PPI norms

Moody's has also placed the bank's rating under review for a potential downgrade.

Jun 12, 2019 03:06 IST India Infoline News Service

Yes Bank

The Reserve Bank of India on June 11 stated that it has imposed a fine on two prepaid payment instrument (PPI) issuers Yes Bank and ZipCash Card Services for violating regulatory norms.

According to an RBI press release, a penalty of Rs11.25 lakh each has been imposed on the two issuers. The fine was imposed on the two entities through speaking orders dated April 22, 2019.

Meanwhile, Moody's has placed the bank's foreign currency issuer rating of Ba1 under review for a possible downgrade. Moody's has also placed the bank's long-term foreign and local currency bank deposit ratings of Ba1, foreign currency senior unsecured MTN programme rating of (P)Ba1, among other instruments under review.

This review for downgrade will consider Moody's expectation that the ongoing liquidity pressures will adversely affect the credit profile of Yes Bank, as the bank has a significant exposure to weaker companies in the sector.

Further, a day after the resignation of non-executive director Ajai Kumar, non-executive independent director Mukesh Sabharwal resigned  from the bank's board. In a regulatory filing, the bank mentioned, "We would like to inform that Lt. Gen Mukesh Sabharwal (Retd), non-executive independent director of the bank has tendered his resignation on June 10, 2019." 

As per the bank's website, it currently has a total of 11 board members, including MD and CEO Gill.

Yes Bank Ltd ended at Rs139.30 up by Rs3.4 or 2.5% from its previous closing of Rs135.90 on the BSE.

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