YES BANK CRISIS

PRESENTED BY-
Mahima Gupta Kanvi Kaushik Naman Kalra
 INTRODUCTION
• On 5th March 2020, the Reserve Bank of India
announced that it was superseding the Yes Bank
Board of Directors.
• This was done for a period of 30 days “owing to
serious deterioration in the financial position of the
bank.”
• The withdrawal limit for its depositors was set to
₹50,000.This dismantled the faith of it’s depositors
and created a panic situation.
• When such an event involving a financial company
take place, people develop a disbelief about the entire
industry.
 REASONS
Deteriorating Financial Position
• its inability to raise capital to address potential loan losses and resultant
downgrades,
• triggering invocation of bond covenants by investors, and withdrawal of deposits

Governance Issues
Bank under-reported NPAs to the tune of Rs 3,277 crore in 2018-19.

False Assurance
There was no concrete proposal from investors to put the kind of money that the
bank required to survive and grow.

Non-serious Investors
The bank was engaged with a few private equity firms for exploring opportunities to
infuse capital as per the filing in stock exchange in February this year.

No Market-led revival in sight

The RBI says since a bank and market-led revival is a preferred option over a
regulatory restructuring, it made all efforts to facilitate such a process and gave an
adequate opportunity to the bank's management to draw up a credible revival plan,
which did not materialize.

Outflow of liquidity
The bank had the deposit book of Rs 2.09 lakh crore at the end of September 2019
RBI Reconstruction Plan
• SBI will have to retain a minimum 26% stake in Yes Bank for 3 years.
• the other investors have to keep three-fourths of their holdings for
3 years.
• tier 1 (AT1) bondholders will get 10.5% of the new equity
• Authorized capital has been raised to Rs 6,200 cr from Rs 1,100 cr
• New board appointed: Shri Prashant Kumar(M.D), Shri Sunil
Mehta; Shri Mahesh Krishnamurthy , Shri Atul Bheda
THANKYOU!