Indian share markets witnessed negative trading activity throughout the day and ended lower. Investors turned cautious ahead of Reserve Bank of India's (RBI) bi-monthly policy statement due on Friday.

At the closing bell, the BSE Sensex stood lower by 199 points (down 0.5%) and the NSE Nifty closed down by 47 points (down 0.4%).

The BSE Mid Cap index ended the day down by 0.3%, while the BSE Small-Cap index ended the day down by 0.4%.

Sectoral indices ended on a mixed note with stocks in the metal sector, finance sector and telecom sector leading the losses, while oil & gas stocks and realty stocks witnessed buying interest.

The rupee was trading at 70.94 against the US$.

Asian stock markets finished on a negative note. As of the most recent closing prices, the Hang Seng was up by 0.3% while the Nikkei was down 2%. The Shanghai Composite ended down by 0.9%.

In news from the banking sector, Yes Bank share price was in focus today. The stock of the lender witnessed buying interest as investors thought the promoter share sale overhang on the stock is over.

Buying interest was also seen as the private lender clarified in a BSE filing that the material drop in its share prices on October 01, 2019 was primarily on account of the forced sale of 10 crores equity shares (3.92% of the Bank's equity share capital) triggered by an invocation of pledge on the equity shares of a large stakeholder.

Further, the bank said that it would like to confirm that it's financial and operating metrics remain intrinsically sound and stable with liquidity position well in excess of regulatory requirements.

Note that the stock of the lender slumped as much as 23% on Tuesday on account of forced sale of 10 crore equity shares, representing 3.9% of the bank's equity share capital.

The bank said a large stakeholder invoked shares pledged with it, following which the entire pledge stood extinguished.

Shares of the bank also tumbled 15% on Monday amid concerns over its exposure to Indiabulls Housing Finance.

Following the recent invocation of pledged shares by lenders and offloading of stake by various promoter entities, co-promoter Rana Kapoor's stake in the bank has slipped below 1%.

The stock price Yes Bank has been under pressure ever since the RBI curtailed its promoter-chief executive Kapoor's term on corporate governance concerns. Many of the bank's past lending bets under Kapoor are haunting the earnings now and keeping the share prices depressed.

How this pans out remains to be seen. Meanwhile, we will keep you updated on all the developments from this space. Stay tuned.

Speaking of the banking sector, the recent Punjab and Maharashtra Co-operative bank fiasco has put small savers in the limelight yet again.

These banks have poor lending practices. Depositors have had to pay the price time and again.

In the short run, this has an adverse effect on microfinance lending as well. Microfinance institutions (MFIs) are skeptical about lending to even genuine borrowers in an uncertain environment.

But this is actually a blessing in disguise for MFIs with strong business practices.

After all, last mile connectivity in lending is still a huge opportunity.

Huge Opportunity in Last Mile Lending in India

Here's what Tanushree Banerjee wrote about this in a recent edition of The 5 Minute WrapUp...

• The average ticket size of a microfinance borrower in India is around Rs 38,000 which is much lower than the global average (Rs 65,000).
  
  The sector itself has grown at an average annual rate of 27% for the last 4 years.
  
  Still states like Uttar Pradesh, Bihar, and Madhya Pradesh with a large rural population are highly under-penetrated even today.

A private bank that is part of Tanushree's 7 stocks to buy list has already taken a step in this direction.

It will be a big beneficiary when the microfinance boom plays out in India.

Moving on to the news from the aviation sector, IndiGo share price was in focus today as the company's co-founder Rahul Bhatia and his IGE Group have submitted a request for arbitration in the London Court of International Arbitration against partner Rakesh Gangwal.

The request for arbitration is submitted amid issues of compliance with the shareholders' agreement and articles of association in the company. IndiGo said that no relief has been sought against the company.

The company in a filing said that it has been named as a necessary and proper party to the arbitration. However, presently, no monetary claim, including any compensation or penalty has been sought against the company.

The shareholders' agreement signed in April 2015 expires shortly.

The agreement and articles of association in which it is embedded, have been the cause of a bitter and very public dispute between Bhatia and Gangwal, who founded IndiGo and developed it into India's biggest airline controlling nearly half of the domestic air passenger market.

Gangwal, among other things, had complained to the markets regulator in July that the agreement is skewed towards Bhatia and that it gives him the power to choose and appoint the chairman, most board directors and the top management executives.

We will keep you updated on how things pan out for the airline. Stay tuned.