Shares on main Indian market dropped in more than 2% last week
The decline was caused mainly by India’s central bank, which took over Yes Bank due to its worsening financial situation.
Main India’s share indexes dropped from 2,3 to 2,5% during Friday. The decline was most visible in banking sector affected by declining value of Yes Bank shares. The company’s stock fell 56% of its value after Reserve Bank of India (India’s central bank) took control over the bank.
With more than 1,000 branches all over the country, Yes Bank represents the fifth largest India’s bank. As a measure, the bank had to limit withdrawals from clients’ bank accounts including cashless transfers. State Bank of India, which may be perceived as an alternative to the Czech Consolidation Agency, stated that it will take a 49% stake of Yes Bank.
Indian Yes Bank has been facing problems in a long term. The bank has growing amount of so-called qualified credits, which are loans with endangered and uncertain maturity. In February, the bank missed more than $2 billion to be financially stable. In last six months, Yes Bank is the sixth major financial institution to have faced existential threats.
