YES Bank denies wrongdoing, says disclosure in line with guidelines

Private sector lender YES Bank on Tuesday denied any wrongdoing stating that the ‘zero divergence’ disclosure was done to comply with the listing regulations and to ensure information symmetry.

Responding to queries by the National Stock Exchange (NSE), YES Bank said the disclosure it made on February 14 was in line with the guidelines laid down by the Reserve Bank of India (RBI) and market regulator Securities and Exchange Board of India (Sebi).

It said it treated the information pertaining to divergence in the RBI’s risk assessment report (RAR) as unpublished price sensitive information (UPSI) and hence, it required an immediate disclosure.

“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 (Prohibition of Insider Trading) Regulations and the NSE and BSE circulars,” it said.

On February 14, the private lender had disclosed that the RAR had not found any divergence in asset classification and provisioning for 2017-18. Following the announcement, shares of YES Bank had skyrocketed 30 per cent.

On February 15, YES Bank made another disclosure stating the RBI had reprimanded it. The central bank in a letter to YES Bank had said the nil divergence disclosure was an attempt to “mislead the public” and the RAR had “identified several other lapses and regulatory breaches”.

Later the stock exchanges sought further clarification from YES Bank on the RBI report.

To the NSE’s query to disclose other information in the RAR, YES Bank said the report was mentioned as “confidential” by the RBI and hence, it was not in a position to provide further details to exchanges unless the central bank allowed the same.

YES Bank also said the RBI and Sebi mandated that the only disclosure related to ‘divergence’ needed to be made public and not any other matter contained in the RAR.

YES Bank stated that other banking peers, too, have submitted the information pertaining to ‘divergence’ to the stock exchanges along with their quarterly results ahead of finalisation of their annual results.

It said the bank has not taken any undue advantage or benefit by disseminating the UPSI. “We humbly submit that the bank has not misrepresented or misled the stock exchanges or investors,” it said to the NSE.