Yes Bank, your compliance officer pays Rs 66 lakh to resolve the case with Sebi

New Delhi, September 4 () Yes, the Bank and its compliance officer, Shivanand Shettigar, have resolved a case, related to alleged disclosure failures in the exchanges, with the market regulator, Sebi, paying a total amount of 66 Lakh rupees for settlement charges.

While Yes Bank remitted a settlement amount of Rs 51.6 lakh, the compliance officer paid Rs 14.45 lakh as settlement charges on August 27, Sebi said in two separate orders.

The regulator initiated procedures after the lender issued a press release on the stock exchanges in February 2019 with the title Divergence in the classification and provision of assets for the position as of March 31, 2018.

Yes, the Bank had reported zero divergences in its asset classification and provision of RBI standards, Sebi said.

According to the circulars of the regulator and the Reserve Bank of India (RBI), banks must disclose divergences in asset classification and provisioning if the additional provisioning requirements assessed by RBI exceed 15 percent of the published net gain after taxes or the additional gross NPAs identified by RBI exceed 15 percent of the incremental gross NPAs published for the reference period.

However, the disclosure of the 'null' divergence is not mandatory by RBI and Sebi, the regulator said.

Sebi said the lender made a selective disclosure by highlighting the 'null' divergence that had a significant positive impact on the price movement and did not reveal other issues mentioned in the Risk Assessment Report (RAR).

In addition, it was noted that the lender did not receive approval from the MD and the CEO before disclosing it to the stock exchanges. The MD and the CEO are key administrative personnel with the purpose of determining the materiality of information that qualifies for disclosure.

Sebi said it was alleged that the lender had made selective disclosures of RAR, highlighted the 'NIL' divergence without proper authorization, did not follow due process to disclose material information and did not have established systems to ensure that proper procedures were followed during the Disclosure of material information under the LODR Regulations (List of Obligations and Disclosure Requirements).

For the compliance officer, Sebi said he was responsible for ensuring that the correct procedure is followed that results in the accuracy, authenticity and completeness of the information, statements and reports.

Pending the adjudication procedures, Yes Bank and Shivanand Shettigar submitted settlement requests to Sebi and offered to resolve the case by paying Rs 51.6 lakh and Rs 14.45 lakh, respectively.

Thereafter, the Sebi High Power Advisory Committee recommended the case of an agreement on the payment of the amount. This was also approved by the Sebi full-time panel of members, after which the lender and the compliance officer remitted the amount.

Consequently, the Securities and Exchange Board of India (Sebi) eliminated the award procedures. The procedure in the matter can be restored if any statement made by the applicant in the settlement procedures is subsequently determined to be false, Sebi said. SRS RVK