Many of us may have heard about Rana Kapoor, a professional banker who was the co-founder and CEO of Yes Bank.

Back in 2003 when the Vajpayee government in India opened up banking licences for the private sector, Rana Kapoor along with his brother Ashok Kapoor was able to secure a licence and launched YES Bank in 2004.

Ashok was a very conservative banker while Rana Kapoor was ready to take risks.
Ashok was killed in the 2008 Mumbai terror attacks, which left Rana Kapoor to lead the bank, even though he was facing lawsuits from his own family, the bank reached the 1 lakh crore mark in 2017-2018. Rana who was pretty overconfident started taking risks and lent huge sums of money to distresses entities like the Dewan housing, Anil Dhirubhai Ambani group etc. His decision to lend them huge amounts later proved to be disastrous as many of them went bankrupt.

The then governor of RBI Mr.Raghuram Rajan started looking into non-performing assets of banks only to find out that banks were clearly understating their Non Performing Assets, His attempts to purify the system led to clashes with the government and the banks. He was later replaced by Urjit Patel who did the same as his successor. When RbI started looking into NPAs it understood that Yes bank was clearly hiding the numbers. When they were under the lens, Yes bank was forced to disclose more and more of their non-performing assets year after year. When Rana Kapoor wanted an extension of his three-year term, it was rejected by RBI. Customers were withdrawing the deposits and at a point, RBI was clear that the will see the collapse of the once shining private bank if its exact situation was made public by financial declaration.

Section 45 of the BANKING REGULATION ACT, provides with reserve bank the power to take control of any bank and remove its management. RBI used this power to remove the YES bank management and fixed the entities share prise to Rs 10. The interference by RBI made the SEBI rules obsolete. They also limited the per month withdrawal for all account holders for a specified period.

Later an SBI led consortium invested in YES bank and made the situation stable, Rana Kapoor is no longer part of YES Bank, As of today the situations seem stable eventhough the one time high tripple digit share prices of Yes bank is now in the range of Rs.15.