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Authors: Ankita Srivastava (ICFAI Business School, Dehradun); Raghvendra Sharma (ICFAI Business School, Dehradun)
Originally published in: 2022
Revision date: 16-May-2022

Abstract

Rana Kapoor and Ashok Kapoor established Yes Bank. After obtaining the certificate of commencement of business, Yes Bank started its banking business in the year 2004. In the subsequent year, Yes Bank decided to get into the capital market and raise funds from the public. The Bank’s decision turned out to be a great success with its public offer being oversubscribed. To explore the potential available in the Indian Banking sector, Yes Bank decided to use technology to improve the quality of its banking operations and collaborated with IBM to develop a robust tech infrastructure. Following its growth strategy and vison 'building the best quality bank of the world in India', Yes Bank earned many prestigious awards and recognitions both at national and international level. As declared by Rana Kapoor, Version 2.0, the second phase of growth for Yes Bank was started in April, 2010. Yes Bank achieved most of its growth objectives during 2010 to 2015. However, the bank witnessed a fast growth during 2010-11 to 2017-18, it also started facing governance issues. These governance issues had serious repercussions and resulted in increasing numbers of NPAs. RBI, the banking regulator in India, observed that NPAs of Yes Bank were much higher than NPAs declared by Yes Bank. There occurred conflicts among promoters of the Bank which led to litigations. In 2018, a whistle-blower reported about irregularities in the banking operations. Many of these irregularities were confirmed by the independent auditors. Substantial, doubts were raised about misappropriation of financial resources of the Bank by its MD & CEO Rana Kapoor. Consequently, banking regulator RBI asked Rana Kapoor to vacate the office of MD & CEO by January 31, 2019. Yes Bank’s reputation was also tarnished greatly when one of its Independent Director resigned from the Board alleging compromised corporate governance standards and compliance failure on the part of the government. Ultimately, to protect the interests of the depositors, Reserve Bank of India had taken over the management of the Yes Bank in its control in March, 2020 and implemented a reconstruction plan.

Teaching and learning

This item is suitable for postgraduate and executive education courses.

Time period

The events covered by this case took place in 2004 to 2020.

Geographical setting

Region:
Asia
Country:
India
Location:
Dehradun

Featured company

Yes Bank Limited
Employees:
10000+
Type:
Public company
Industry:
Banking & financial services
Other keywords:
Corporate Governance, Business Ethics

About

Abstract

Rana Kapoor and Ashok Kapoor established Yes Bank. After obtaining the certificate of commencement of business, Yes Bank started its banking business in the year 2004. In the subsequent year, Yes Bank decided to get into the capital market and raise funds from the public. The Bank’s decision turned out to be a great success with its public offer being oversubscribed. To explore the potential available in the Indian Banking sector, Yes Bank decided to use technology to improve the quality of its banking operations and collaborated with IBM to develop a robust tech infrastructure. Following its growth strategy and vison 'building the best quality bank of the world in India', Yes Bank earned many prestigious awards and recognitions both at national and international level. As declared by Rana Kapoor, Version 2.0, the second phase of growth for Yes Bank was started in April, 2010. Yes Bank achieved most of its growth objectives during 2010 to 2015. However, the bank witnessed a fast growth during 2010-11 to 2017-18, it also started facing governance issues. These governance issues had serious repercussions and resulted in increasing numbers of NPAs. RBI, the banking regulator in India, observed that NPAs of Yes Bank were much higher than NPAs declared by Yes Bank. There occurred conflicts among promoters of the Bank which led to litigations. In 2018, a whistle-blower reported about irregularities in the banking operations. Many of these irregularities were confirmed by the independent auditors. Substantial, doubts were raised about misappropriation of financial resources of the Bank by its MD & CEO Rana Kapoor. Consequently, banking regulator RBI asked Rana Kapoor to vacate the office of MD & CEO by January 31, 2019. Yes Bank’s reputation was also tarnished greatly when one of its Independent Director resigned from the Board alleging compromised corporate governance standards and compliance failure on the part of the government. Ultimately, to protect the interests of the depositors, Reserve Bank of India had taken over the management of the Yes Bank in its control in March, 2020 and implemented a reconstruction plan.

Teaching and learning

This item is suitable for postgraduate and executive education courses.

Settings

Time period

The events covered by this case took place in 2004 to 2020.

Geographical setting

Region:
Asia
Country:
India
Location:
Dehradun

Featured company

Yes Bank Limited
Employees:
10000+
Type:
Public company
Industry:
Banking & financial services
Other keywords:
Corporate Governance, Business Ethics

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