Yes Bank share price shocker! Not just Rana Kapoor exit, this resignation too sparks negativity

Yes Bank’s shares remained one of the most volatile stocks in the banking sphere in 2018. On Thursday, the shares plunged 7.42% after its non-executive independent chairman Ashok Chawla resigned the previous day.

Yes Bank, in a regulatory filing on Wednesday evening said Chawla has resigned with immediate effect as he felt the bank would need a chairman who could devote more time and attention during this transition period when its managing director and chief executive Rana Kapoor is on his way out after the Reserve Bank of India (RBI) refused to give him an extension.

However, media reports said that Chawla, who is also the chairman of NSE and former finance secretary, has resigned from the private lender’s Board after being named in a corruption charge-sheet by the Central Bureau of Investigation (CBI) in the Aircel-Maxis case.

In another regulatory filing on Wednesday, the bank said its another independent director Vasant Gujarati has also resigned with immediate effect due to personal commitments. Gujarati was the chairman of the bank’s audit committee. He was replaced by Uttam Prakash Agarwal, former president of Institute of Chartered Accountants of India. Yes Bank’s Board has approved Agarwal as an additional independent director and subsequently as an independent director for a period of five years, subject to shareholders’ approval.

On Thursday, the stock touched a high of Rs 218 and a low of Rs 202.30 before closing at Rs 206 apiece. The share price has been on a downward move since September 21 after RBI refused to grant an extension to Kapoor to continue as MD and CEO. His term will end on January 31, 2019. On September 21, YES Bank’s share closed at Rs 227.05, 28.71% lower than its previous close.

This year, the stock touched a 52-week high of Rs 404 on August 20 and a low Rs 166.15 on September 28 on BSE.

The bank made a plea with the RBI to extend Kapoor’s term till at least April 2019 but it was rejected. RBI, on the other hand, has asked YES Bank to ensure that a replacement is in place from February 1, 2019. At a time when the private lender is struggling to find Kapoor’s replacement, it now has to look to fill the position of the chairman as well.

This article first appeared in DNA Money as 'YES Bank most volatile bank stock in 2018'