Red-flags on multiple breaches of RBI's norms in YES Bank case in FY20
The auditor of YES Bank has pointed out multiple breaches of the Reserve Bank of India’s (RBI’s) norms and loan covenants by the private bank in the financial year ended March 2020, warning that these may impact the bank’s ability to continue as a going concern.
The bank has breached the regulatory requirements of the RBI regarding maintaining the minimum common equity tier-1 (CET-1) and tier-1 capital ratios, which indicates the position of capital adequacy of a bank. The CET-1 ratio and the tier-1 capital ratio for the bank as of March 31, 2020, stood at 6.3 percent and 6.5 percent as compared to the minimum requirements of 7.375 percent and 8.875 percent, respectively. It was suggested by the auditors that the bank would have to take more steps to increase its capital base in the year 2020-21.
