Yes bank

About:

Yes, Bank Limited is an Indian public bank headquartered in Mumbai, India and was founded by Rana Kapoor and Ashok Kapur in 2004. It offers a wide range of banking and financial products for corporate and retail customers through retail banking and asset management services On 5 March 2020 in an attempt to avoid the collapse of the bank, which had an excessive amount of bad loans, the Reserve Bank of India (RBI) took control of it. RBI later reconstructed the board and named Prashant Kumar, former Chief financial officer of SBI, as new MD & CEO at Yes Bank.        

Work:

YesBank has interests in syndicated loans and corporate banking. It has three subsidiaries – Yes Bank, Yes Capital and Yes Asset Management Services.

As of September 2018, Yes Bank had taken syndicated loans from eight large international entities including ADB, OPIC, European investment bank, banks in Taiwan and Japan for amounts ranging from US$30 million to US$410 million, which is, in turn, lend to small and medium scale enterprises as well as large corporates. It has also both taken as well as give short term loans to several retail and corporate banks in Taiwan, Japan, the United States, and Europe. It has partnered with the US government based OPIC and with Wells Fargo to support women entrepreneurs.

Yes, Bank provides Unified Payments Interface (UPI) services for several major companies, such as Airtel, Cleartrip, RedBus, and PhonePe among others. In January 2020, it was responsible for handling 514 million UPI transactions out of the 1.31 billion made that month. Yes, the bank has acquired over 24 per cent of stake in dish TV India on 30 May 2020.

Details of YES bank:

Yesbank is banking, financial services industry which was founded in 2004;16 years ago. Rana Kapoor and Ashok Kapur are the founders of yes bank. The headquarters of yesbank is situated in Mumbai, Maharastra, INDIA. Sunil Mehta is chairMAN of yes bank and Prashant Kumar is CEO and MD of yes bank

Yesbank provides products like credit cards, customer banking, corporate banking, finance and insurance, mortgage loans, private banking, wealth management, investment banking.

·     Revenue.           :            Rs10,247 crore(us$1.4billion)(2020)

• OPERATING income :         Rs3,518crore(us$490million)(2020)

·     Net income.     :      Rs-16,418crore(us$-2.3billion)(2020)

·     Total assests. :    Rs257,827crore(us$36billion)(2020)

·     Owner             :    State bank of india(49%)

•number of employees:  18,239(2018)

·     Capital ratio.       :  17.0%

·     Website:  Www.yesbank.in

CRISIS of yes bank:

·    But what created panic among the general public, and in particular the deposit holders in Yes Bank, was the RBI’s decision to cap withdrawals at Rs 50,000.

·    On March 5, the Reserve Bank of India announced that it was superseding the Yes Bank Board of Directors for a period of 30 days “owing to serious deterioration in the financial position of the Bank”. 

·    The RBI said it had “no alternative but to” place the Bank under moratorium “in the absence of a credible revival plan, and in public interest and the interest of the bank’s depositors…”

·    Between 2004, when it was launched, and 2015, Yes Bank was one of the buzziest banks. In 2015, UBS, a global financial services company, raised the first red flag about its asset quality. The UBS report stated that Yes Bank had loaned more than its net worth to companies that were unlikely to payback. However, Yes Bank continued to extend loans to several big firms and became the fifth-largest private sector lender

·    the type of firms and sectors to which Yes Bank was lending resulted in the start of the crisis. According to one estimate, as much as 25% of all Yes Bank loans were extended to Non-Banking Financial Companies, real estate firms, and the construction sector

·    These were the three sectors of the Indian economy that have struggled the most over the past few years. As Charts 2 and 3 show, Yes Bank was overexposed to these toxic assets. It was only a matter of time that non-performing assets (NPAs) started rising in Yes Bank.

How it reach the present situation:

·     As the per the RBI order, Yes Bank will now be allowed to repay loans or advances granted against government securities or other securities to the bank by RBI or by any other bank and remaining unpaid as of Thursday.

·     India’s fifth-largest private sector lender turned wobbly due to surging bad loans and management uncertainty when the RBI declined to extend the term of founder Rana Kapoor as chief executive in 2018. Under his successor Ravneet Gill, the bank managed to raise only one round of funds through share sale to institutional investors, but that didn’t prove to be enough.

·     Assurances from the government and RBI has done little to assuage her fears for now. On 6 April, RBI released a draft for the reconstruction of Yes. The draft mentioned that State Bank of India has expressed its willingness to invest in Yes Bank and participate in its reconstruction. RBI governor Shaktikanta Das also pledged to act swiftly to resolve the crisis.

·     The worst is behind for India’s embattled Yes Bank, or so the country’s central bank has assured nervous depositors and investors. Yet, the recent feverish behaviour of the private lender translates into an epidemic-like scenario for India’s troubled banking sector.

·     In a hurriedly-called press conference yesterday (March 16), Reserve Bank of India (RBI) governor Shaktikanta Das assured all stakeholders that its reconstruction plan for Yes Bank is credible and sustainable.

RECENT news :

Yes, Bank takes Zee Entertainment to court over $50 million loan guarantee spat.

I-T exemption on buying shares at a discounted price in firms under insolvency proceedings.

Yes Bank to auction properties of Essel Infra, SKIL Infra in July to recover

PhonePe launches UPI handle in partnership with ICICI Bank

After ICRA, CARE downgrade, Yes Bank says has enough liquidity to meet all obligations.

Yes, Bank interest default a warning on what rising NPAs could do.

Icra downgrades Yes Bank Upper Tier II bonds to default rating.

RBI extends Rs 50,000-crore special liquidity facility to Yes Bank for 3 more months.

Yes, Bank receives approval to raise Rs 15,000 crore through FPO: Report.

RBI bars Yes Bank from paying interest on tier-2 bonds