Shares of Ujjivan Financial Services Ltd slumped as much as 19% while Equitas Holdings Ltd dropped nearly 28% on Friday after the Reserve Bank of India clarified that promoters of small finance banks must list their banking units separately within three years of operations.

The RBI also reiterated that promoters of small finance banks should maintain their stake to at least 40% for a period of five years from the date of commencement of operation of banks.

Both the stocks have wiped out nearly entire gains for those who bought shares in initial public offerings (IPOs). The shares are currently trading below their issue price. Both listed in 2016.

Ujjivan Financial touched a record low of 181.15 a share and fell as much as 17.62%, its biggest single-day fall since listing. Equitas Holdings slumped 23.34% to touch an all-time low of 99.05 a share.

“RBI has asked Equitas Holdings and Ujjivan Financial Services to list their small finance bank subsidiaries within three years of operations. The much awaited dispensation of this clause has not come through. The management is yet to get clarification if they would be allowed to collapse the structure after five years of operations as the need for promoter ownership does not exist. A temporary period of a small holding company discount is now likely to be in place," said Kotak Institutaional Equities in a note to its investors.

Both Ujjivan Financial and Equitas Holdings run small finance banks. For Equitas Holdings, the RBI oder will mean that the small finance bank should be listed by 24 September 2019 while for Ujjivan Financial it should list its small finance bank by 30 January 2020.

Equitas Holdings said in a notice to exchanges that it board and that of Equitas Small Finance Bank (ESFBL) will meet on 1 November and 2 November, respectively, to consider steps to get shares of ESFBL listed within prescribed timelines and approach RBI for an approval to merge with the bank at an appropriate time post the lock-in period.

“We wish to inform that the bank and the company are committed to consider all appropriate measures to ensure the timely compliance of directives of the RBI while ensuring the long-term interest of the shareholders of the company are maintained," Ujjivan Financial said in a note to BSE

Earlier, the RBI had denied a three-year extension to Yes Bank’s chief executive officer Rana Kapoor and asked him to step down after 31 January 2019.