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Yes Bank From Diamond to Dust 

In the recent turn of events revolving around YES Bank and steps taken by the RBI for its a revival, we take a look at how the once 5th largest lender in the country has come down to the position of causing the Sensex to crash. 

The crisis raises fear of another IL&FS case as the share price of Yes Bank tumbles down by 54.89% amid a slowdown in the economy. The bank’s financial position has been witnessing a steady decline mainly because of its inability to raise capital and its increasing amount of nonperforming assets.

However, its serious managerial issues over the past 2 years have contributed the most towards the investors’ and depositors’ loss of faith in the bank.

Stepping in RBI, in constant touch with the bank’s management tried to find ways to strengthen its balance sheet and liquidity. The management had indicated to RBI on several occasions that it is in talks with investors and they were likely to be successful. When in reality there was no such concrete proposal from investors to put the kind of money it needed to survive and grow. 


Date Events Yes Bank Share Price
June 2018 Yes, Bank’s shareholders approve Rana Kapoor’s reappointment as MD and CEO for 3 years from September 1. 323.32
September 2018 After RBI’s announcement of Kapoor’s term till January 31, 2019. Yes, Bank shares tank more than 30 percent, and the lender loses as much as Rs 21,951 crore ($3.1 billion) in market value. 213.83
October 2018 RBI refuses to give Rana Kapoor more time thus appointing advisory firm Korn Ferry to help find a new CEO by February 1, 2019.
Yes, Bank’s 2nd quarter profit misses estimates as provisions for bad loans and mark-to-market losses more than double, and deteriorating assets.
November 2018 Ashok Chawla resigns as chairman after being charged for corruption. Vasant Gujarathi also steps down as an independent director.
OP Bhatt also resigns as an external expert of the search and selection committee, due to “potential conflict of interest”.
Independent director Rentala Chandrashekhar resigns. Moody said resignations from the bank’s board raise concerns over corporate governance.
March 2019 Ravneet Gill takes charge as Yes Bank MD and CEO. Bank’s shares gained nearly 3%. RBI slaps Rs 1 crore fine on Yes Bank for non-compliance in Swift operations. 238.5
April 2019 Yes, Bank posts a net loss of Rs 1,506.6 crore in the 4th quarter. The aggregate outstanding funded exposure of the bank stands at Rs 2,528 crore at the end of the fiscal year, of which Rs 2,442 crore is classified as NPA. Shares plunged nearly 30% after results. 171.2
May 2019 Former RBI Deputy Governor R Gandhi appointed additional director on Yes Bank board. 130.56
July 2019 YES, Bank shares slump 19% after 1st quarter profit plunges. The shares fall further after reports emerge about Rana Kapoor’s pledging of the entire stake in the bank. 83.25
September 2019 Rana Kapoor sells a 2.75% stake in Yes Bank through an open market, which reduces equity to 6.89%. 48.75
November 2019 Yes, Bank posts a Rs 600.1 crore net loss in the September quarter.
SPGP Holdings, backed by Canada-based Erwin Braich, offers a $1.2 billion deal to YES Bank.
December 2019 Yes, Bank shares fell over 9% as Moody’s gave a ‘negative’ outlook, citing asset quality concerns and the shrinking capital. 46.65
January 2020 Yes, Bank board member Uttam Prakash Agarwal resigns citing poor corporate governance and writing SEBI seeking a regulatory probe into insider trading resulting in shares to fall more 6%.
YES, Bank announced that it will not proceed with the $1.2 billion offer by Canada-based Erwin Braich. It also further scales down its fundraising plans.
March 2020 The moratorium imposed by RBI with withdrawals capped at 50,000, SBI and LIC planning to buy stakes in the bank. 16.15


As is evident from the data in the table, after several management position changes including resignations, allegations of insider trading, an increasing number of NPAs, sharp drops in the share price, failure to secure an investor, the RBI decided to step indefinitely.

According to RBI, in the absence of a credible revival plan, and in public interest and the interest of the bank’s depositors, it had no alternative but to impose a moratorium.

 Yes, Bank has 29L savings bank accounts and deposits worth 2.09L Crore of Rupees within 1122 branches across the country, 3.47L crore rupees in assets and is currently under a moratorium placed by RBI and limit on withdrawals for up to 50,000 for a month. Meanwhile, RBI is devising revival plans for the bank with SBI and LIC planning to bail out Yes Bank by buying its stake for a less than justifiable amount. 

The withdrawal limit in the event of medical emergencies, higher education fees or marriage expenses has been relaxed up to a cap of Rs 5 lakh. Online transaction-based mobile application PhonePe is temporarily down as its UPI partner was Yes Bank. Moreover, 20 asset managers hold Yes Bank’s shares worth Rs 525.5 crore through 72 schemes, according to data from Value Research among which HDFC Mutual Fund has the highest percentage. The RBI has come forward and assured depositors of the bank that their interests will be fully protected and there is no need to panic. 

With all of Yes Bank’s operations under strict scrutiny by the RBI and zero power to its Board of Directors, the future of the bank can only be as hopeful as much as the RBI feels merciful. 

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