Yes Bank shares fell sharply on Thursday, a day after non-executive independent chairman Ashok Chawla resigned, further fuelling the uncertainty over the management of the country's fifth largest private-sector lender. Yes Bank shares fell as much as 9.1 per cent to Rs 202.25, in their biggest single-day fall since October 26. At 1:40 pm, the Bank's shares were trading at Rs 205.85, down 7.4 per cent on NSE benchmark index Nifty50.
According to sources, Mr Chawla offered to quit as controversy was being generated on his continuance on the board of directors following his name appearing in a CBI charge-sheet in the Aircel-Maxis case.
Mr Chawla's departure exacerbates the turmoil the management is in, after the Reserve Bank of India (RBI) denied an extension to its Chief Executive Officer Rana Kapoor for a second time last month.
"There have been challenges in the bank. Any news that someone is resigning raises speculation about what is happening in the bank. It raises doubt the corporate governance of the bank," an analyst with a Mumbai-based brokerage, who did not wish to be named, said.
"The faith in the institution again has to be built up.
Till the time you don't instill confidence in terms of bringing a credible management on board and the RBI gives nod that in terms of the asset quality reviewed, the divergence was limited, the stock will be a little volatile," the analyst added.
The bank will name a new chairman in due course, subject to an approval from the RBI, it said late on Wednesday.
"The problem is who is going to drive the bank, though it might not be a long-term problem," said AK Prabhakar, head of research, IDBI Capital in Mumbai.
"These are the banks where the ownership is still there and they will try to find a new person and very soon they will come out of this. There is some uncertainty due to which the volatility has increased, but the management is very clear how they are going to proceed," Prabhakar said.
Yes Bank is looking for a new chief executive by the February 1 deadline imposed by central bank.
Follow NDTV for latest election news and live coverage of assembly elections 2019 in Maharashtra and Haryana.
Subscribe to our YouTube channel, like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.