Mumbai, Feb 7 (IANS): India's fourth largest private lender, Yes Bank, has been in the eye of the storm over the lack of clarity on its capital raising program, causing massive erosion in market cap and angst among its investors.

If the ex-independent Director Uttam Prakash Agarwal is to be believed, at a January 9 board meeting, as many as three advisors to the bank -- Avendus Capital, IDFC and Ambit Securities-- had reportedly warned Yes Bank's management that it is "premature to raise funds (USD-3 billion) for the next 2-3 months".

In his detailed letter to the Reserve Bank of India (RBI), accessed by IANS, Agarwal claimed that the Yes Bank management was cautioned against raising funds as the lender "requires sufficient time for assessment of requirement of funds by the bank, need for the third quarter results, identification of investors, due diligence roadshows..and the bank's continuous vows on account of burgeoning NPAs".

Agarwal further told IANS that he had been on the bank's board for over a year and if he did not comply with the fit and proper criteria on the bank, "why was I made the President of the Audit Committee?"

"One of the reasons I quit was that I objected to the appointment of the CFO. He was appointed without my consultation which was against the rules.

"There are no criminal charges against me. Therefore, objection on fit and proper criterion doesn't hold ground," he said.

Repeated attempts to reach Yes Bank did not elicit a response. A detailed questionnaire sent to the bank also remained unanswered.

Agarwal's letter also said: "In order to keep the momentum manipulative and selective information being provided to the stock exchanges and other stakeholders, the bank's Chairman and MD Ravneet Gill, knowing that it is near impossible for the bank to raise such a large capital in a short period of one month, still went ahead with the move."

"Gill had stated that the bank would convene an extraordinary general body meeting for an increase in the authorised share capital by additional Rs 10,000 crore and an omnibus approval for raising capital," he alleged in the letter.

Last month, Agarwal tendered his resignation from the office of the Independent Director of Yes Bank and Chairman of Audit Committee and members of all other committees of the board.

However, the bank in a regulatory filing had said that it was "reviewing the 'fit and proper' status of Agarwal and a call was to be made on the very day he resigned".

In January, Yes Bank had rejected Erwin Singh Braich's $1.2 billion investment offer and said it plans to raise Rs 10,000 crore by issuing securities. The bank also said it will take up Citax Holdings, and Citax Investment Group's investment offers in the next board meeting.

The lenders' finances have also come under heavy scrutiny in recent months.

Rating agency ICRA noted that Yes Bank's solvency profile remains weak with net NPA/CET of 36 per cent as on September 30, 2019. A number of rating firms have red flagged the bank's exposure to stressed projects.

Owing to uncertain news flow, Yes Bank, once billed as a favourite of traders, has gained the reputation of being one of the biggest wealth destroyers in the market. Its stock price on Thursday closed at Rs 38.70 per share - plummeting from a high of Rs 285.90 on April 4, 2019.