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The ICRA rating agency downgraded Yes Bank's long-term ratings. "Long-term ratings remain under scrutiny with negative implications," he said in a note, adding that the downgrading of the rating reflected the series of resignations from the board of directors, prompting concerns for the governance of the bank.
Among other obligations, the rating of Basel 2 lower level 2 bonds for the amount of Rs 2,530.6 crore and Rs 7,030 crores of infrastructure bonds were demoted from AA + to AA. For senior II bonds of 1,344.10 crore Rs in accordance with Basel II requirements and 461 crore of complaint under Basel II, Innovative Tier I perpetual debt securities of the bank, the rating was lowered from AA at AA-.
CIFAR had previously placed long-term rating of Yes Bank Guard with negative implications on November 16, 2018, following which another independent director resigned from the bank's board of directors.
ICRA had already pointed out that these developments (resignations) would have a negative impact on the bank's capacity. to raise capital, which has always been taken into account as one of the main credit badets.
Despite these developments, the ICRA noted the stability of the deposit base and the liquidity profile of the bank, without any significant change in the deposit. the bank's levels between August 2018 and November 2018 and stated that she would continue to monitor the progress made by the bank with regard to the appointment of a new CEO, the results of the Commission's audit by the regulator, increase of capital to improve the capital buffer and any further development likely to affect the credit profile.
"In the midst of all these developments, the stability of the deposit base will remain a controllable key element", ICRA
"However, the note may be deleted if the bank is able to maintain the quality to maintain / maintain the stability of its depositors base and to improve its capital reserves, "he said.
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