Why did the RBL Bank stock crack sharply on 27 December?

The RBL Bank stock cracked 10% on opening and soon dipped more than 20% lower on Monday. This was after RBI appointed Yogesh Dayal to the board of RBL Bank and their CEO Vishwavir Ahuja was sent on long leave. There was relentless selling after a number of brokers downgraded the stock on the back of regulatory uncertainty created by the RBI move. Many Investors even anticipated a repeat of the Yes Bank scenario.

Both the Reserve Bank of India and RBL Bank tried their best to allay concerns, but markets continued to remain sceptical. The markets always had doubts about the asset quality and in the Café Coffee Day case, even the corporate governance standards came into question after the top management was guilty of insider trading.