The share price of private lender Yes Bank soared 29 percent on Thursday morning after the RBI (Reserve Bank of India) said that there was "no observation on divergence" in terms of asset classification and provisioning done by the bank during 2017-18.
As part of its supervisory processes, the RBI assesses compliance of banks with extant prudential norms on income recognition, asset classification, and provisioning (IRACP).
"As part of this process, Yes Bank has received the risk assessment Report for 2017-2018. The report observes NIL divergences in the bank's asset classification and provisioning from the RBI norms," it said.
Shares of Yes Bank rose 29.9 percent to hit an intra-day high of Rs 220.25 apiece while on BSE, it climbed 28.95 percent to jumped to Rs 218.
Experts say that with this report, the major concerns of investors have been addressed, especially considering the past few months of speculation. Brokerage Motilal Oswal Securities said the RBI report has removed any challenges that the new management would otherwise have to deal with to align with the Central Bank's asset quality standards.
Investors are now expecting normalcy in operations to return once the replacement for Rana Kapoor joins in as the new CEO before 1 March 2019.