Days after RBI pulled up Yes Bank for making a report marked 'confidential' public, the private lender put up a stout defence, saying the NPA divergence information was in due compliance.
"The bank in its assessment was of the view that the disclosure pertaining to divergence was a UPSI and required prompt dissemination to the Stock Exchanges in order to ensure compliance with Sebi (PIT) Regulations and the NSE & BSE circulars," Yes Bank said in a regulatory filing to the NSE.
The bank said it divulged the RBI report to ensure information symmetry.
"Immediately on receipt of the RAR
report, to mitigate and to avoid any further speculation, misuse or
leakage of the UPSI, it was decided to disseminate the information
regarding "Divergence" to the stock exchanges, so as to ensure
information parity, instead of withholding this information till
finalization of the Annual Results," the bank further stated.
The bank "has not made any undue advantage or benefit by
disseminating the UPSI. Hence, we humbly submit that the bank has not
misrepresented or misled the stock exchanges/ investors in terms of
Regulation 4(1)(c) of Listing Regulations".
UPSI stands for Unpublished Price Sensitive Information.
YES Bank had earlier informed stock exchanges that the RBI has not found any divergence in the asset classification and provisioning done by the lender during 2017-18.
But RBI has maintained that ‘nil’ divergence is not an achievement
to be published and is only compliance with the extant Income
Recognition and Asset Classification norms.
The regulator also pointed out that its Risk Assessment Report (RAR)
identified several other lapses and regulatory breaches in various
areas of the bank's functioning and the disclosure of just one part of
the RAR is viewed as a deliberate attempt to mislead the public.
However, the RBI’s harsh view of Yes Bank’s move has confused
lenders on whether it is a good practice to disclose NPA divergence,
even though regulatory guidelines make it compulsory to disclose it in
their notes to accounts.
Source- Economic Times
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