YES BANK
Banks lend chunks of money to large corporates. These corporates sometimes default in their payments and then banks go begging for money. It has happened many times earlier, it is happening and it will happen.
Firstly, such cases definitely require a probe as it is the public money that is lent. Secondly, banks don't really lend if they are not sure about the repayments. So, there is something fishy going on with Yes bank. Zooming in, we find there is always one big shot causing all havoc. In the story of Yes bank, it is Rana Kapoor, the founder himself. He advanced a shitload of money to companies to which other banks turned their back. The owner of those were none other than Rana's daughters.
RBI checks the accounts of other banks periodically. During this process, RBI found that Yes bank was under reporting their NPAs and various other norms were violated. Added to this was the bad governance that made RBI dissatisfied.
In 2018, They reduced the tenure of Rana Kapoor as CEO. In the same year, the chairman and director resigned. This raised doubts on the future of Yes bank and reduced the public confidence. They started withdrawing their money. The stocks plunged and problems came to light. Rana Kapoor and his daughters were arrested.
When banks don't do well, RBI has all rights to intervene and do whatever it takes to revive the bank, even if that means changing the complete management.
On March 5, 2020, they imposed moratorium for a month. All the regular functions came to halt. This again had a worse impact.
• The account holders were not allowed to withdraw more than Rs.50,000 unless it is really an emergency.
• Many fintech startups were also affected. The one which was hit the hardest was PhonePe, an online payment system. PhonePe users were not able to make any transactions because of the moratorium. Flipkart, Swiggy etc. removed all those payment mechanism related to Yes bank.
RBI has taken full control over the restructuring of this bank to protect the interets of its depositors. The State Bank of India also intervenes to help raise capital and will hold 49% stake in the restructured bank.
As on 15th March, the stock is available at Rs.25 !!! If you think all of the government measures would be fruitful and the bank would find its place again in the best of banks list, then BUY it now. (If you think :P)
If you love reading newsbytes, do SHARE and SUBSCRIBE :)
Firstly, such cases definitely require a probe as it is the public money that is lent. Secondly, banks don't really lend if they are not sure about the repayments. So, there is something fishy going on with Yes bank. Zooming in, we find there is always one big shot causing all havoc. In the story of Yes bank, it is Rana Kapoor, the founder himself. He advanced a shitload of money to companies to which other banks turned their back. The owner of those were none other than Rana's daughters.
RBI checks the accounts of other banks periodically. During this process, RBI found that Yes bank was under reporting their NPAs and various other norms were violated. Added to this was the bad governance that made RBI dissatisfied.
In 2018, They reduced the tenure of Rana Kapoor as CEO. In the same year, the chairman and director resigned. This raised doubts on the future of Yes bank and reduced the public confidence. They started withdrawing their money. The stocks plunged and problems came to light. Rana Kapoor and his daughters were arrested.
When banks don't do well, RBI has all rights to intervene and do whatever it takes to revive the bank, even if that means changing the complete management.
On March 5, 2020, they imposed moratorium for a month. All the regular functions came to halt. This again had a worse impact.
• The account holders were not allowed to withdraw more than Rs.50,000 unless it is really an emergency.
• Many fintech startups were also affected. The one which was hit the hardest was PhonePe, an online payment system. PhonePe users were not able to make any transactions because of the moratorium. Flipkart, Swiggy etc. removed all those payment mechanism related to Yes bank.
RBI has taken full control over the restructuring of this bank to protect the interets of its depositors. The State Bank of India also intervenes to help raise capital and will hold 49% stake in the restructured bank.
As on 15th March, the stock is available at Rs.25 !!! If you think all of the government measures would be fruitful and the bank would find its place again in the best of banks list, then BUY it now. (If you think :P)
If you love reading newsbytes, do SHARE and SUBSCRIBE :)
Comments
Post a Comment