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Volatility erupted in India’s stock market on Friday, with plunges in Yes Bank Ltd. and Dewan Housing Finance Corp. setting off an exodus from financial shares.

Yes Bank sank to the lowest level since 2016 after India’s banking regulator refused to extend the tenure of the lender’s chief executive officer, while Dewan tumbled 43 percent for its steepest loss on record.

The benchmark S&P BSE Sensex swung from a 1 percent gain to a drop of as much as 3 percent -- its wildest intraday move in more than four years -- before closing with a 0.8 percent loss. Friday’s declines showed that investors remain jittery about Indian financial shares after a recent default by Infrastructure Leasing & Financial Services Ltd. shook confidence in the sector.

Read more: The Indian Debt Default That Has People Worried

“IL&FS’ problem and Yes Bank’s issues are impacting every financial stock in the market,” A K Prabhakar, head of research at IDBI Capital Market Services Ltd., said by phone. “Leveraged positions are being reduced.”

Dewan Housing has a strong liquidity position and sufficient funds available to service any repayment obligations, Chairman Kapil Wadhawan told Bloomberg in a phone interview. The company has no exposure to to IL&FS Group, Wadhawan said.

Read more on Dewan Housing Finance Corp.’s crash amid default fears

DSP Mutual Fund sold Dewan Housing bonds this week to boost its cash holdings before an expected tightening of market liquidity in September, Kalpen Parekh, president of DSP, said in an interview. The firm sold 3 billion rupees ($41.6 million) of the bonds to express “our interest view, not a credit view,” Parekh said. “This has been done across issuers over last few days.”

Some investors are speculating that the Reserve Bank of India may tighten rules for housing finance firms after a long legacy of shoddy lending that’s resulted in ballooning bad debts. This comes after the central bank said Yes Bank’s chief executive officer will have to step down at the end of January.

Read Bloomberg Intelligence’s take on Yes Bank

“Investors are speculating that more bad loans may come to light as RBI may take stricter action,” said Soumen Chatterjee, head of research at Guiness Securities.

The RBI has also taken a tough line with other private-sector bank CEOs in recent months. The central bank refused to extend the tenure of Axis Bank Ltd. chief Shikha Sharma, who said she would step down at the end of 2018 despite support from shareholders.

The IL&FS downgrade and default may have nudged investors to avoid potential collateral damage in other financial stocks.

“Downgrades are a serious possibility” for non-bank financial companies, Aneesh Srivastava of IDBI Federal Life Insurance Co. said.

After a world-beating advance, the outlook for India’s stock market might be turning amid the financial-industry turmoil. Goldman Sachs Group Inc. published a report dated Sept. 16 that called time on the rally and downgraded its stance to the equivalent of a hold rating, citing elevated valuations.

The turbulence in India follows bursts of market volatility across Asian and developing countries this year. While a record-breaking surge in U.S. stocks has kept equity markets largely buoyant, some investors are growing skittish as global interest rates rise. The Hong Kong dollar posted its biggest swing since 2003 on Friday, while markets from Turkey to Argentina have endured big spikes in volatility in recent months.

“A bearish phase in the market is beginning,” IDBI Federal’s Srivastava said.