Huge setback for Yes Bank! Decommissioning of Moody's; shares fall by 4%

The rating agency Moody's significantly downgraded the rating of the Indian private bank during the financial failure of Yes Bank.

In a huge setback for Yes Bank, the rating agency Moody's lowered Tuesday the rating of the Indian private bank. Moody's lowered the bank's foreign currency rating from Baa3 to Ba1.

The deterioration of the rating agency follows the decision of the Reserve Bank of India (RBI) not to extend the term of the founder and CEO Rana Kapoor beyond 21 January 2018. " The rating action takes into account the resignation of several members of the board of directors, which has raised concerns about corporate governance, "said Moody's in a statement. .

The rating agency also changed the perspective of the bank. Kapoor reportedly raised regulatory anger after the bank found under-reported NPAs worth more than Rs 10,000 crores during the 2016 and 2017 fiscal years.

"Management Changes and Governance Issues" could limit bank's ability to raise new capital "

A Bloomberg report on Sunday said Morgan Credits offered the Kapoor family a way to monetize its shares without pledging them. Later, PTI reported that entities related to the Yes Bank promoters paid Rs. 400 crore to two mutual funds from which they raised funds by pledging shares.

Kapoor and his family own 9.8% of the shares of Yes Bank Madhu Kapur, wife and sister of Ashok Kapur, owns about 9%. Kapoor had previously stated that even if he would leave the CEO position, he would not sell his stake in the bank. "Diamonds are forever," he said on Twitter.

Following the report, shares of Yes Bank fell 3.43% to 181.50 rupees per share on BSE, while he was the main winner of the morning trade.