Thread by @ramanmann1974

Thread

#YesBank Story

How Rana Kapur gobbled 5000 crore in kickbacks

Give out loans to doubtful Co's
They become NPA's
Instead of declaring em NPAs & initiating recovery proceedings, Kapoor conspired with the companies & got them to invest in firms run by his wife & daughters.

In 2015, @RBI, under asset quality review, the RBI inspectors found that #YesBank had suppressed its NPAs — reportedly underreporting the same by Rs 2,299 crore in 2018-19, Rs 6,355 crore in FY 2017 and over Rs 4,000 crore in FY2016 —as well as it had cooked up its balance sheet.

Rana Kapoor continued his rein till 2019, when he was shown the door, but by then, it was already too late

Meanwhile, the bank’s bad loans kept growing. Following the RBI’s asset quality review in 2019, its gross #NPA's surged 87% from a year ago, Its net NPAs more than doubled.

From total advances of 55,633 crore in 2014, the number grew nearly five times to 2,41,500 crore in 2019 —a CAGR or compounded annual growth rate of 34.1 per cent, as compared to roughly 10-12% for other lenders. #YesBank's model rested on targeting lending to shaky #corporates !

Left without funds following the global financial crisis of 2008 that came after the credit boom of 2003-2007, Indian corporates had been finding the going tough, with projects stalled and stuck with overcapacity. Many, like #DHFL & #Reliance Infra, among others, went belly up !

80.2% of #YesBank’s total loan advances were to corporates, with retail portfolio accounting for the rest.

While excessive leverage by many of the corporates to whom Yes Bank lent caused stress, what gave in was alleged intent to hide its NPAs through an “ever-greening of loans”

ED, which has arrested Rana Kapoor, declared in court that of the 30,000 crore that #YesBank sanctioned during Rana Kapoor's tenure, 20,000 crore had turned into #NPAs, that it had found details of Rs 5,000 crore in kickbacks that Kapoor received while extending these loans.😬

By 2016-17, RBI had wind of Kapoor’s misdeeds, but no other action was initiated, @RBI could have initiated PCA & slapped curbs on lending. But RBI allowed #YesBank to function freely… that too when nearly a dozen PSU banks were under PCA curbs due to the high level of bad loans

Accountability should be set from the #YesBank's Board of Directors to "more than" questionable decision-making by its #promoter, to "credit rating agencies", to @RBI, who should have been more prompt about detection of stressed books & the lack of corporate governance standards.