Analysis of Yes Bank Scam



Yes Bank was established jointly by Rana Kapoor and Ashok Kapoor in 2004. Although there were legal controversies regarding the ownership of Yes Bank after the unfortunate death of Ashok Kapoor, Rana Kapoor had taken the responsibility of running Yes Bank.


Detail analysis of Yes Bank Scam

 The fall of Yes bank began in 2008. It was believed and suspicions began to arise when the working style of Rana Kapoor changed and he began to lend loans aggressively to “Stressed Companies” and charged high interest rates on the given loans.

He began to play very risky game with banking system and these facts were first pointed out by UBS. In 2015, UBS or Union Bank of Switzerland is a global financial services company who claimed that the major reason behind the sudden rapid success was them lending loans to stressed or vulnerable companies.


 Stressed companies are highly risky companies who are not able to repay loans on time and generally are prone in making defaults. The reason behind Yes Bank Scam was combination of bad loans and NPAs (non-performing assets). If for 90 days or more, the loans are still not paid and the payment is delayed, then such loans would come under NPAs.


The rising NPAs of Yes Bank were also noticed by Reserve Bank of India (RBI) in 2017.It began to monitor the mentioned bank very strictly. RBI also discovered that not only the NPAs of the Yes bank was also the bank was hiding its real figure of NPAs. RBI discovered that the bank was projecting a fake figure of its NPAs. The difference between the actual figure and the real figure was found to be 3000 crore rupees.

According to the reports, majority of loans had been given by Yes Bank after 2014. It was also discovered that in 2014, 55,000 crore rupees of loan had been lent by the bank according its loan books. The loan lending had increased to 2 lakh 41 thousand crore rupees.

From the above analysis, RBI is strictly monitoring the working of Yes Bank since 2017. However, there are so many loan lending transactions which still took place between 2017 and 2019. One question which arises is that in spite of knowing the working and condition of Yes bank, why were they giving loans to these companies?



On September 2018, in order to save Yes Bank, RBI instructed and ordered Rana Kapoor to resign from CEO position. On November 2018, not only the rating of the bank continuously fell but also two independent directors and a chairman of the bank resigned.

Thereafter, Rana Kapoor was no longer the CEO of Yes Bank in January, 2019.

Reputed credit rating firms such as CARE (Credit Analysis & Research) and Moody’s have given very bad ratings to the bank. According to Moody’s the bank is in a stable condition anymore and it has given a negative rating to the bank.

 Ravneet Gill became the new CEO of the YES Bank. The bank still had to face number of hardships due to the scam; booking its first quarterly loss on April 2019. Moreover, the stock of the bank had been degraded to 30%, and their NPL ratio fell to 8%. Rana Kapoor had to sell his entire shares which were worth 142 crore rupees on November 2019.

According to many reports and news, it was anticipated that RBI might purchase this bank (YES Bank). ED (Enforcement directorate) found that Rana Kapoor alongside his relatives claimed 78 shell organizations (is an organization that another organization takes over to acquire advantage from its name) in beyond couple of years.

All the information and activities performed by such companies were tracked by ED and CBI through DIN (Director Identification Number). Thereafter, for performing the crime of fraud and money laundering, Rana Kapoor was arrested by ED on 8th March,2020.

Measures taken by RBI

Moreover, on 5th March 2020, RBI brought this entire matter into their hands by declaring moratorium and setting a limitation that the individuals who have saved their cash in YES Bank, can just pull out 50,000 rupees in a month and not more than that, with the exception of emergency cases. After this the stock of the bank tumbles down, Sensex likewise tumbles down. 


In spite all of this, on the off chance that your cash is stored in Yes Bank today, there is no reason that anyone should fear as your cash is protected and you will get it from the bank on schedule.


Since, Yes Bank is an exceptionally gigantic bank and the government in any case will figure out how to run this bank, since they can't manage the cost of the disappointment of the bank, since there are many individuals reliant upon it.

 Furthermore, on the off chance that investors didn't get their cash back, the trust and the certainty of the contributors will lose from the financial framework which not only includes the clients of Yes Bank but also clients of different banks too.

 Individuals will imagine that now their cash isn't protected in any bank, so it's smarter to pull out their cash as quickly as possible which might cause a bank run.

This will not only have a negative influence only on the Yes Bank but also every other banks as well. The entire financial framework will implode. That is the reason why government won't allow this bank to fizzle under any conditions.

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