Mumbai: Yes Bank shares touched a new 52 week low as they fell more than 8 per cent responding to the Reserve Bank of India appointing late on Tuesday, R Gandhi, former Deputy Governor, RBI as an additional director on the board of the bank for a period of 2 years.
R Gandhi was appointed additional director with effect from May 14, 2019 to May 13, 2021 or till further orders, whichever is earlier, as per the letter issued by RBI.
Yes Bank shares faced selling pressure after opening lower at Rs 154.90 through out the trading session and touched an intra-day low of Rs 142.50 on BSE and Rs 141.80 on NSE. Yes Bank finally closed 8.01 per cent down on BSE at Rs 143.65 and at Rs 142.95 on NSE.
Equity analyst said the appointment of additional director on the bank's board raised concerns of governance issues for the bank and were taking a cautious view on the stock.
Lalitabh Shrivastawa, Assistant Vice President - Research, Sharekhan by BNP Paribas said, "RBI's move to nominate an additional director on the Board of Yes Bank brings back concerns of governance issues once again for the bank. Coming on the back of recent downgrade in earnings and tight capital adequacy situation at the bank, the stock can further get de-rated owing to uncertainties on the growth outlook ahead. We have cautious view on the stock."
Mustafa Nadeem, CEO, Epic Research said, "If not explicit its implicitly a concern for investors and anyone who is looking to hold the stock for the long term. Since the last few quarters' stock has been in the news. Due to concern over its balance sheet, asset quality, exposure to IL&FS, directors and now RBI appointing an additional director for two years.
The RBI’s letter regarding appointment of an additional director said that the Reserve Bank of India in exercise of powers conferred under sub- section (1) of Section 36AB of the Banking Regulation Act, 1949, appointed R Gandhi, Ex Deputy Governor, Reserve Bank of India as an Additional Director on the Board of the Bank for a period of 2 years with effect from May 14, 2019 to May 13, 2021 or till further orders, whichever is earlier."
