why yes bank failed what is the reason why is it a bank which was one of the most prospering banks a few years back what went wrong now in the Year 2034, yes Bank was granted a banking license, Rana Kapoor, the founder of yes Bank started the bank to provide the best quality banking services to the customers wouldn’t it takes 10 years yes bang emerged as one of the top five private banks in India.
The bank’s growth was very fast Rana Kapoor held 26% stake in yes Bank as banks started to grow in business the share price of yes Bank touched the sky and moved from 50 to 1888 within a short span of time after August 2018 with one and a half years the share falls from one eight eight to six now this is one of the most historic falls in the history of Indian banking from eighteen hundred and eighty-eight to six rupees.
Now you can imagine it’s such a big fall so let me talk about some of the major things which happen with yes Bank in 1999 Rana Kapoor Ashok Kapoor in her Koosh started a rebel India financed in 2002 with the support of rebel bank yes Bank was granted a banking license in 2003 Rana Kapoor and Ashoka pool promoted yes bang 2005 yes bang IPO worth 300 crores were oversubscribed in 2017 the RBI judged the gross NP as eight thousand three hundred and seventy-three Koror for yes Bank against a declared gross NP of 2018 Karo thus there was a divergence of 6355 crores three times the reported amount that means yes bank was not reporting its NPA they were hiding the NPA’s more than three times of what was reported the bank shall fall down by thirty percent due to RBA raising questions RBA raise issues of corporate governance and serious lapses with the
the functioning of yes bank leading to the outset of CEO Rana Kapoor in 2019 Rana Kapoor and promoter entities yes capital and Morgan credits have sold the remaining 0.8 percent stake in private lender yes bank and in
the bank’s balance sheet malpractice found for a bad loan in 2000 2020 the bank declared the that the unknown NRI will invest in the bank and try to fall down the share price so what are some of the important reasons why yes Bank failed it failed because of the deteriorating financial position over the past few years the financial position of yes Bank was declining because of the management the man was unable to raise capital to address the
potential loan loss and result in downgrade governance issue now the bank has experienced serious governance issue and practices that led the bank to decline stage the third point is nonserious investors now yes Bank was engaged with few private equity firms for exploring opportunities to infuse capital but these investors did hold discussions with senior officials of Reserve Bank but for various reasons eventually did not infuse any capital with a spank the fourth reason is false assurance RBI says that it was in constant touch with the bank’s management to find ways to strengthen the balance sheet and liquidity the management of the bank had indicated that our BA in concentration but yes bank will certainly give a turnaround.
But never happened no market-led revival insight there was no plan no management nowhere there was a turnaround plan which was there in place and the sixth and the most important reason is an outflow of liquidity the bank was facing regular outflow of liquidity which means that the bank was witnessing withdrawal of deposits from customers the bank had the deposit book of 2.09 lacquer at the end of September 2019 these are some of the reasons of this downfall and this is going to be a big setback for the Indian banking sector and I’m sure this will also be an eye-opening message for other banks in RBI especially who’s responsible for regulating these banks thank you.