Shares of private sector lender Yes Bank tanked almost 29% on Friday after the Reserve Bank of India (RBI) extended the term of its managing director and chief executive officer Rana Kapoor only till January while the board had sought a three-year term.
Post the trading hours on Wednesday, Yes Bank informed the exchanges that Mr. Kapoor’s term had been extended till January 2019. Thursday was a holiday for the markets.
According to Motilal Oswal Financial Services, this development had come as a clear setback for the bank and would have implications for its growth plans.
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“The potential change in business strategy post the management change... will likely have an impact on its loan growth/fee income, even as the capitalisation level already remains modest,” it said. ICRA revised the bank’s rating outlook from positive to stable on RBI’s recent direction. All other ratings on borrowing programs stand reaffirmed, it said.