Shares of YES Bank hit its 52-week low on Friday, down 85 percent in intra-day deals after the government capped withdrawal limit at the private sector lender to Rs 50,000. The government has effected moratorium on YES Bank from March 5 to April 3 on the recommendation of Reserve Bank of India (RBI). The order came into effect from 6 pm on Thursday.

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The stock fell as much as 85 percent to hit its 52-week low of Rs 5.55 per share on BSE in intra-day deals. At 2:15 pm, the stock was trading 53.7 percent lower at Rs 17 as compared to a 2.4 percent fall in BSE Sensex at 37,539.

According to the order, the private lender will not pay depositors more than Rs 50,000 during the moratorium period, irrespective of the number of accounts with the bank.

The RBI has superseded the board of YES Bank with immediate effect and has appointed former SBI chief financial officer Prashant Kumar as administrator for YES Bank. It also clarified that the restriction on withdrawal is subject to conditions and it can be a general or special order permit the bank to allow withdrawal of over Rs 50,000.

Post the order BSE issued a statement saying, no Futures and Options contracts shall be available in YES Bank for trading in Equity derivatives segment from May 29, 2020 onwards.

Moody’s Investors Service, in a statement, said that RBI’s moratorium on Yes Bank is credit negative as it affects timely repayment of bank depositors and creditors. While Moody’s expects Indian authorities will take steps to prevent the weakness in the bank’s viability from significantly impacting its depositors and senior creditors, the lack of a coordinated and timely action highlights continued uncertainty around bank resolutions in India.

In a related development, State Bank of India and Life Insurance Corporation of India are likely to pick up 24.5 percent stake each in Yes Bank, in a government- and RBI-approved bailout of the beleaguered private-sector lender. Yes Bank shares jumped 27 percent on Thursday after a Bloomberg report in the morning said SBI will pick up stake in the bank.

Other brokerages also maintained bearish views on the stock. JPMorgan cut the scrip's target price to Re 1 from Rs 55, while maintaining an 'underweight' rating. It said that the new capital will come in at a steep discount to current share price and that SBI being called for 'national service' is incrementally negative for its valuations.

Macquarie also expects a sharp downturn move in both SBI and Yes Bank even though the sudden collapse of the private lender has been averted for now by the RBI and the government.

First Published:Mar 6, 2020 9:42 AM IST