What happened with Yes Bank? | Candider
What happened with Yes Bank?

5th largest private bank of India, Yes Bank Ltd. is under a great crisis, actually, it was already known that this bank is going to be in a crisis very soon. As the crisis of Yes Bank was continuously last 3 years. 


What happened?


RBI took the charge of Yes Bank Ltd. and put a moratorium for one month. Account-holders can withdraw up to ₹50000 only until the end of the moratorium. 


Threat to bank


There will be a lack of trust on this bank from the users, after the revocation of the moratorium. 


What will happen?


State Bank of India is going to but 49% stakes in the Yes Bank Ltd. SBI will invest twelve thousand crore rupees in Yes Bank to make it at least functional. Yes bank is having balance sheer of 2 lakhs 40 thousand crores. There is a requirement of at least 30 thousand crores to run this bank efficiently. SBI will attempt to pump up the image of the bank and build trust again with the aim to sell the acquired stakes and take it to just 26% of ownership. There will be no harm to depositors' money. RBI was continuously asking for NPA figures, so there will be chances of having NPA of 30000 to 40000 crores. 


Why did it happen?


The reason of this crisis was that to provide loans to companies like Reliance (Anil Ambani Group), Cafe Coffee Day, SR, SL, Cox and Kings, DHFL, IL&FS, Vodafone and the like, which resulted in bad loans later. Yes Bank didn't disclose the actual amount of NPA yet.


The business model of Yes Bank 


People always found how this bank was so profitable and maintaining high profile images continuously, the reason was that a group of business friends continuously obtained loans from this bank. Yes Bank was famous to provide risky loans at a high interest rate and provide a higher interest rate to depositors asl well. It was having a great digital assets model with apps like PhonePe.


Who are responsible?


Management - as there is a lack of proper management in this bank. 

Regulators - Leniency by the regulators.



It is very difficult for any government to support any private sector bank as it always been considered sceptical, but as India's economy is at its slowest pace, hence government have to provide support to Yes Bank, to maintain the financial score of the country.