Mumbai: A day after Moody's downgraded it citing poor corporate governance, its domestic arm Icra Wednesday followed suit with a similar action, downgrading Yes Bank's long-term ratings.
"The rating downgrade considers the series of resignations from the board of directors, which raises concerns on corporate governance at the bank," Icra said in a late evening note Wednesday.
The agency had placed the bank on rating watch earlier this month and had said the resignations--there were three so far--would impede the bank's ability to raise capital.
The agency, however, acknowledged that there is stability in the deposit base and liquidity profile of the bank with no significant change in the deposit levels between August and November.
It will continue to monitor the progress made by bank on the appointment of new MD & CEO, the outcomes of the risk supervision audit by the RBI, capital raising to improve the capital cushion and any further developments which may impact the credit profile.
The agency also warned of further downgrades if there are adverse developments on any of the above factors and added stability in deposit base is a key monitorable.
The capital cushion for the bank has been "weakening" vis-a-vis the regulatory requirements, it said.
The bank has been facing troubles since mid-September, when the RBI curtailed the term of its chief executive Rana Kapoor, who is also among the promoters. The action came after a similar move against Axis Bank's Shikha Sharma. No reasons have been specified for the actions.
But an RBI audit has found both the lenders to have under-reported their stock pile of dud assets by over Rs 10,000 crore each for two consecutive years.
The bank was later rocked by a series of resignations, starting with its non-executive chairman Ashok Chawla, which was succeeded by three other non-executive directors with R Chandrashekhar being the last one.