project on yes bank

1. BY : PURVI CHUDASAMA - 10
YASH OZA - 14
DHIRESH MANGE - 30

2. COMPANY PROFILE
• Yes Bank was incorporated as a Public Limited Company on November 21, 2003. and
was founded by Rana Kapoor.
• . YES BANK operates its Investment banking, Merchant banking & Brokerage
businesses through YES SECURITIES, a wholly owned subsidiary of the Bank.
• Yes Bank obtained its certificate of Commencement of Business on January 21, 2004.
• Subsequently, in March 2004, the Bank achieved the mobilization of the initial
minimum paid up capital of Rs. 200 cr

3. RISK PROFILE OF COMPANY
• The bank was at its peak but every investor felt something suspicious with such high
numbers and finally in 2017, RBI sensed a problem with this bank and started
monitoring over its governance issues and finally pointed out that Bank was hiding its
actual NPAs.
• It was promptly caught by the RBI in 2015, 2016 and also in 2017 which involved the
RBI directing Yes bank along with several other banks to report transparently.
• The bad or unrecoverable loans given out by Yes Bank stood at Rs 50,396 crores as of
September 2019.
• With news of Yes Bank shares tumbling with over 85% downfall and founders accused
of money laundering, made Yes Bank hard to be recognized as the same bank that once
attracted so many retail and veteran investors.

4. A large amount of loan
A large amount of withdrawls
Manipulated NPA’s
Huge liabilities
Bad investments
Low PCR
High CDR
FACTORS THAT LED TO DOWNFALL OF YES BANK

5. CHART OF YES BANK

6. RISK MANAGEMENT
• Risk management is put into core values of Yes Bank and is top-down and bottom-up driven.
• Risk is kept in mind at three levels – in doing business (credit risk, market risk, liquidity risk),
in conducting business (operational risk) and zero tolerance risk (compliance risk).
• While all employees are responsible for managing risk, the accountability is put on the Board
of Directors.
• Yes Bank believes that ‘risk management is an art’ and hence gives high importance to board
and management architecture stressing that they have to be given powers and made
accountable for risk management.

7. • The culture is such that risk identification, appraisal and appropriate time-bound initiatives to
mitigate risk with the objective to balance risks with returns.
• Five Board-level sub-committees look after risk management and are responsible for framing
policies, frameworks and systems.
• These include: Risk Monitoring Committee (RMC), Audit Committee (AC), Fraud
Monitoring Committee (FMC), Board Committee on Wilful Defaulters & Non-Cooperative
Borrowers and Board Credit Committee (BCC).
• RMC is responsible for preparing policies, frameworks and systems and ensures they are
periodically updated.
• The Chief Risk Officer (CRO) leads the Credit Risk Unit.

8. WHY YES BANK COLLAPSED
Poor Loan Policy
Financial Position
Governance Issue
Investor’s issue
The Liquidity Risk

9. FUTURE AHEAD OF YES BANK
• A new board was set up by RBI for regulating the governance of the bank. The RBI has a draft
reconstruction plan for YES Bank which proposes that depositors’ funds would be protected.
• Loans should be given to companies who shall repay the loan and no bad loan situation could be
raised in the future.
• The employees would also have the same service conditions, including remuneration, at least for
one year.
• Yes Bank is the biggest bank in the private sector and even most UPI apps are dependent upon Yes
Bank. As such, apps were facing issues that week when the news came out.

10. • SBI should take over the loan book of YES Bank, recover the loans, and return the
depositors money.
• The new draft scheme proposes full repayment of all deposits, dilution of equity, and write-
off of Rs 10,800 crore of additional tier one (AT-1) bonds.
• While Yes Bank’s depositors are sure to heave a huge sigh of relief, India’s banking sector
is still far from out of the woods. Clearly, the RBI and Centre have their task cut out in
ensuring that the need for such bailouts is obviated.

11. • There are various reasons that led Yes bank to this crisis, they are, there were a large number
of bad loans given by banks and depositors have withdrawn large numbers of amounts from
the bank.
• There was no balance between the loan sheet and the depositors’ sheet. RBI put a 30 days
moratorium on Yes Bank to save it.
• A major effect of the yes bank crisis was that there was a big chance that other financial
institutions could collapse.
• But the Reserve Bank of India took initiative and saved Yes Bank from major collapse.
CONCLUSION