YES BANK : Reality Or Facade

Yes Bank was started by Rana Kapoor and Ashoka  Kapoor in 2004. It’s headquarter is in Mumbai and the MD or CEO of Yes Bank is Ronit Gill. When Yes Bank came into existence, Its main Moto was to increase his customers by giving more and  more loans and by giving them more interest on their deposit than the any of the other banks.

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At a time when most banks were struggling with rising bad loans, YES Bank had managed to keep a check on its non-performing assets (NPAs). However, following the AQR review, the bank reported a divergence of Rs4,176 crore ($580 million) in its gross NPAs for the year ended March 2016. In the next financial year, as well after RBI’s audit, the bank reported an even larger loan divergence of Rs6,355 crore, which was three times the reported amount.

HERE THERE ARE THE NAME OF THE BIGGEST DEFAULTERS OF YES BANK:

1•)  IL&FS
2•)  DHFL.
3•)  JET AIRWAYS.
4•)  COX&KINGS.
5•)  CAFE COFFEE DAY.
6•)   RELIANCE GROUP.
7•)  ESSEL COMPANIES.
8•)  CG POWER.
9•)  ALTIKO
₹11,159 crore of rupees of the bank  got dunked due to the NPAs. For increasing its customer base, the Bank opened 1120 branches and 1450 ATMs in all over the country and started giving interest of 6% on their deposit .Since the total deposited money of the bank was 2.27 lakh crore while the total asset worth 3.80 lakh crore but in the background NPAs of the bank started increasing that was 6,335 crore in 2017 and 11,159 crore in 2019, i.e; approx double.
That’s where the reserve Bank of India interrupted to the functioning of the Yes bank and it was also found that the bank was manipulating its figures. The NPAs shown to the reserve Bank of India was 749 crore but the exact NPAs of the bank was 4900 crore.

WHY YES BANK HAS BEEN PLACED UNDER MORATORIUM TILL APRIL 3,2020 ?

 

As we all know that Yes Bank Ltd is the 5th largest private lender bank of India and it was placed under moratorium(after severe deterioration of its financial position) till April 3 (effective from 6 p.m. on 5 March 2020)by the central government of India after considering an application by the reserve Bank of India.
The reserve Bank of India explained that in the absence of a credible revival plan and in the interest of Yes Bank’s depositors, It had no alternatives but to advice the Center Government for imposing moratorium on the private lender under section 45 of the banking regulation act 1949.
The reserve Bank of India has suspended the board of the bank ,and has appointed Prashant Kumar, Deputy Managing Director and Chief Financial officer of the State Bank of India, as the administrator.
 The Yes Bank customers can not make the regular withdrawals of more than 50,000 per day. If any of the depositor who need money for the educational purpose or for marriage  or medical treatment and any other unavoidable emergency, in these cases the depositors will be allowed to withdraw up to a maximum of 5 lakh.
The Reserve Bank of India(RBI) has also stated that the Yes Bank would draw up a scheme for the Banks Reconstruction or Amalgamation.

Does YES BANK is going to Recover?

YES BANK paid a huge price, market punished them for the wrong doings and we know how it has been a wealth destroyer in such a short time.

Now to regain the glory, it will take time. It should, as it rightly does now, infuse additional capital to meet any loan asset slippages, fully provide, be transparent and get the market’s confidence , all of which is not easy.

So, yes it is possible but it is a long road to glory.

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