Yes Bank Stock Crashes Over 70% After RBI Takes Charge; Rahul Gandhi Attacks PM Modi Over Crisis

The private lender bank lost nearly three-fourth of its share value during Friday's early trade. At 11.37 a.m., Yes Bank shares plunged over 74 per cent to Rs 9.75 a share.

Shares of Yes Bank crashed by 74 percent on Friday morning, a day after the Reserve Bank of India (RBI) said it is superseding the board of troubled private sector lender with immediate effect. (Getty images)

New Delhi: Shares of Yes Bank crashed by 74 percent on Friday morning, a day after the Reserve Bank of India (RBI) said it is superseding the board of troubled private sector lender with immediate effect. The private lender bank lost nearly three-fourth of its share value during Friday's early trade. At 11.37 a.m., Yes Bank shares plunged over 74 per cent to Rs 9.75 a share. Amid the Yes Bank crisis, Senior Congress leader Rahul Gandhi in his veiled attack on the Prime Minister said Narendra Modi and his ideas have destroyed India’s economy. Rahul Gandhi said, "No Yes Bank. Modi and his ideas have destroyed India’s economy."

No Yes Bank.

Modi and his ideas have destroyed India’s economy. #NoBank — Rahul Gandhi (@RahulGandhi) March 6, 2020

Meanwhile, the National Stock Exchange (NSE) said in a circular that no future and options contracts will be available in Yes Bank for trading in the equity derivative segment from May 29. The SBI board had given the largest lender an "in-principle" approval to invest in the capital-starved Yes Bank. The central bank has also imposed a moratorium on the private lender till April 3, 2020. Withdrawals from the bank have been capped at Rs 50,000 per depositor. Moody's on Yes Bank had said that RBI's moratorium on Yes Bank is credit negative as it affects timely repayment of bank depositors and creditors.

While Moody's expects Indian authorities will take steps to prevent the weakness in the bank's viability from significantly impacting its depositors and senior creditors, the lack of a coordinated and timely action highlights continued uncertainty around bank resolutions in India.

The move by RBI comes nearly six months after it did the same with Mumbai-based Punjab and Maharashtra Cooperative (PMC) Bank. Meanwhile, State Bank of India (SBI) clarified that no negotiations related to an investment in Yes Bank had taken place. Former SBI's Chief Financial Officer Prashant Kumar has been appointed the administrator of Yes Bank. Also Watch | RBI Governor: Yes Bank resolution will be swift (with inputs from agencies)