Mumbai, Nov 27 (IANS) Credit ratings agency A Moody's Investors Service on Tuesday downgraded Yes Bank's foreign currency issuer rating to 'Ba1 from Baa3'.
According to the agency, the developments around leadership transition as well as the governance issues are credit negative.
"Moody's has also downgraded the bank's foreign and local currency bank deposit ratings to 'Ba1/NP from Baa3/Prime-3' and foreign currency senior unsecured MTN program rating to '(P)Ba1 from (P)Baa3'," the agency said in a statement.
Further, Moody's downgraded Yes Bank's baseline credit assessment (BCA) and adjusted BCA to 'ba2 from ba1'.
"The rating action considers the resignation of various members of the bank's Board of Directors -- which, when seen in conjunction with the Reserve Bank of India's (RBI) directive in September 2018 to restrict the term of the bank's MD and CEO as well as founder, Mr. Rana Kapoor, till 31 January, 2019 -- has raised Moody's concerns over corporate governance," the statement said.
"In Moody's opinion, although the bank's reported credit fundamentals remain stable, the developments surrounding the transition in leadership as well as the governance issues are credit negative because they complicate management's effective implementation of the bank's long-term strategy."
Furthermore, the ratings agency said that developments could constrain the bank's ability to raise new capital.
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