You are here: Home » Markets » News
Business Standard

YES Bank hits 5% upper circuit as CARE upgrades debt instrument rating

The revision in the ratings factors in the improvement in the credit profile of the bank post the implementation of the reconstruction scheme, the rating agency said

YES Bank | Buzzing stocks | Markets

SI Reporter  |  Mumbai 

YES bank

Shares of were locked in 5 per cent upper circuit for second straight day at Rs 13.54 on the BSE on Tuesday after rating agency CARE Ratings upgraded the ratings, with stable outlook, assigned to the bank's debt instruments. Till 02:48 pm, a combined 88 million shares had changed hands and there were pending buy orders for around 47 million shares on the NSE and BSE, exchanges' data show. In comparison, the S&P BSE Sensex was up 1.4 per cent at 43,191 points.

“The revision in the ratings assigned to the debt instruments of factors in the improvement in the credit profile of the bank post the implementation of the reconstruction scheme announced by the Reserve Bank of India (RBI) and approved by Government of India (GOI) from March, 2020,” CARE Ratings said in its rationale.

The reconstruction scheme for has brought about strong systemic support to the bank by various market participants including GOI, RBI and State Bank of India (SBI) acting in order to protect the depositors’ money by way of providing capital support, liquidity support and reconstitution of the board of directors for better governance, it said.

The ratings remained constrained on account of stressed asset quality parameters as well as expected higher credit costs in the near to medium term on account of the Covid-19 related stress on the advances book. The bank has seen a significant decline in scale of operations with a sizeable decline in its deposit base especially during March 2020 quarter (Q4FY20); however, the bank has been able to increase its deposits during the first half (April-September) of the current fiscal, the granularity and proportion of the low cost Current and Savings Account (CASA) deposits remains moderate. The ability of the bank to grow its scale through build-up of granular advances and broad-based deposit mobilization would be a key monitorable, the rating agency said.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, November 10 2020. 14:57 IST