here bank scams been explained

1. Dr. N.G.P. ARTS AND SCIENCE COLLEGE
Coimbatore – 641 048 | Tamil Nadu | India
Banking & Insurance Practices
By
Mughilan.E
(221CO024)
II - BCOM A

2. The Yes bank had grown to be the 4th largest private sector
bank in the country at its peak. The bank had initially established a
customer-centric and service-driven bank for the future corporates of
the country. It had released its Initial public offering and kept developing
up to the 2008 global financial crises. Harkirat Singh, on the one hand, had
left the bank at an initial stage, and on the other hand, Ashok Kapur had
unfortunately died in the 2008 terrorist attack in Mumbai, leaving Rana to
be the only founder left. In order to achieve success, the bank had started
to focus on its operations rather aggressively.
INTRODUCTION: BRIEF HISTORY OF THE BANK

3. DETAILS OF THE CASE
Yes Bank's financial position had been declining steadily, and it was mostly
because of the inability to raise capital. The bank had undergone grave governance
issues and practices in recent years, which encouraged the decline. The bank had to
struggle a lot to raise the basic capital required to stay above regulatory
requirements as it had a very high level of bad loans. It is to be noted that the bank
has more corporate customers than retail customers and the fact that most of the
companies. The bank gave loans to companies that were at a loss. The fact that
these companies by themselves were sinking and on the verge of bankruptcy was
also a reason that increased the bad loan of the bank.

4. DETAILS OF THE CASE
Rana Kapoor had sold his entire stake in the bank in November 2019, after it
turned out that Yes Bank had completely become unbankable. Rana Kapoor is
currently in Enforcement Directorate's custody on money laundering charges,
registered by the CBI. The case revolves around an alleged bribe of Rs 600 crore by
the DHFL to the Rana Kapoor family on a quid pro quo basis.
On March 7th 2020, CBI registered a case for alleged cheating, fraud, criminal
conspiracy in sanctioning of loans by YES Bank and in exchange receiving bribes
from DHFL promoter Dheeraj and Kapil Wadhawan.

5. DETAILS OF THE CASE
The charge sheets had also included DHFL, its promoters Wadhawans, DOIT Urban Ventures Ltd,
owned by Kapoor's daughters, as an accused in the said scam case. According to CBI, during his
tenure, Rana Kapoor had extended credit facilities to DHFL through YES Bank and, in exchange,
received large monetary benefits for himself and the hundreds of companies controlled by him and
his family.
The Reserve Bank of India had, on March 5th 2020, imposed a 30-day moratorium on YES Bank.
According to the terms of the said moratorium, deposit withdrawals were allowed only at Rs 50,000
per person.The centralbank has also proposeda reconstructionscheme.

6. RBI’s action against YES bank
The Reserve Bank of India took over overall bank management. The Reserve Bank of India
had imposed a moratorium on Yes Bank for 30 days. There was no need to invest additional capital to address the NPA
situation. The bank’s financial situation was insufficient to raise the capital. There was also a breach in corporate
governance at the bank. This Moratorium was a temporary suspension of lender authority. Due to the Moratorium,
depositors were permitted to withdraw up to Rs.50,000 per person and up to Rs.5 lakhs in medical or emergency
situations. In the event of an emergency, depositors are given some relief.
Conclusion:
Yes Bank is a bank that offers banking and financial services. Rana Kapoor and the late
Ashok Kapoor founded Yes Bank Ltd.on November 21, 2003. Because Yes Bank was the largest private sector bank,
the Yes Bank crisis caused widespread panic in March 2020. For a period of 30 days, the Reserve Bank of India took
over the Yes Bank board of directors.”A brief history of Yes Bank” Yes Bank is a bank that offers banking and financial
services. Rana Kapoor and the late Ashok Kapoor founded Yes Bank Ltd.on November 21, 2003. The bank received the
Financial Express Awards for India’s Best Banks in 2006. Yes Bank was the first institution in the world to receive
funding through IFC’s Managed Co-Lending Portfolio Program, and it was also the first Indian bank to raise a loan
through IFC’s A/B loan facility.

7. PNB Scam
What is PNB Scam?
The Punjab National Bank scam relates to fraudulent letter of undertaking worth Rs 10,000 crore issued
by the bank. The key accused in the case were jeweller and designer Nirav Modi, his maternal uncle
Mehul Choksi, and other relatives and some PNB employees. Nirav Modi and his relatives escaped India
in early 2018, days before the news of the scam became public. PNB scam has been dubbed as the
biggest fraud in India's banking history.
How the 10,000-crore scam happened?
Bankers used fake Letters of Undertakings (LoUs) at PNB's Brady House branch in Fort, Mumbai. The
LoUs were opened in favour of branches of Indian banks for import of pearls for a period of one year, for
which Reserve Bank of India guidelines lay out a total time period of 90 days from the date of shipment.
This guideline was ignored by overseas branches of Indian banks. They failed to share any
document/information with PNB, which were made available to them by the firms at the time of availing
credit from them.

8. Nirav Modi got his first fraudulent guarantee from PNB on March 10, 2011 and managed to get 1,212 more such
guarantees over the next 74 months. The Enforcement Directorate (ED) recovered bank token devices of the
foreign dummy companies used by the fugitive diamond trader to transfer the fraudulent funds. The probe agency
found that Nehal Modi, brother of Nirav Modi had destroyed the devices and had even secured a server located at
United Arab Emirates (UAE) soon after the scam broke out. These dummy firms had been receiving the fraudulent
PNB LoUs and were based out in British Virgin Island and other tax havens. The enforcement agency has so far
seized movable and immovable properties to the tune of Rs 2362 crore in the PNB fraud case.
How was the Punjab National Bank management oblivious to this?
PNB employees misused the SWIFT network to transmit messages to Allahabad Bank and Axis Bank on fund
requirement. While all this was done using SWIFT passwords, the transactions were never recorded in the bank’s
core system — thereby keeping the PNB management in the dark for years.
How did the scam unfold?
On 29 January 2018, PNB lodged a FIR with CBI stating that fraudulent LoUs worth Rs 2.8 billion (Rs 280.7 crore)
were first issued on 16 January. In the complaint, PNB had named three diamond firms, Diamonds R Us, Solar
Exports and Stellar Diamonds. As of 18 May 2018, the scam has ballooned to over Rs 14,000 crore.
PNB Scam

9. PNB Scam
Who is Nirav Modi?
Nirav Modi is a luxury diamond jeweller and designer who was ranked 57 in the Forbes list of
billionaires in 2017. He is also the founder of the Nirav Modi chain of diamond jewellery retail stores.
Modi is the Chairman of Firestar International, the parent of the Nirav Modi chain, which has stores in
key markets across the globe. He has 16 stores in diverse locations such as such as Delhi, Mumbai,
New York, Hong Kong, London and Macau. He is currently in the United Kingdom and is seeking
political asylumin Britain.