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Case Competition 2021

YES BANK SAGA: THE COST OF SAYING 'YES'

Prof.Ganesh Kumar Nidugala ,Professor of Economics, IIM Indore, Mr Javed khan Nagarji, MBA ,IIM Indore & Om Sai Keerthi Soppa ,MBA ,IIM Indore
Yes bank, Rana Kapoor, non performing assets (NPA),RBI, Asset Quality Review ( AQR), ROA, Global financial crisis, Asset Reconstruction Company (ARC), Strategic Debt Restructure (SDR),bank corruption , prompt corrective action, insolvency and bankruptcy, ( IBC), corporate governance, Public Sector Asset Rehabilitation Agency (PARA) , banking scam.

Abstract:   Recent developments in the Indian banking industry raised several questions about the direction in which the Banking sector in India is heading and its ability to support the Indian economy in the long run. With high profile fraud getting unearthed in some Indian private and cooperative sector banks and mounting bad loans the time seems to be right to raise several important questions regarding future of Indian Banking Industry and future strategies to be adopted by Government of India and Reserve Bank of India to address several problems associated with Indian banking sector. One of the high-profile banking fiascos in recent years is that of Yes Bank. The private sector lender has gone from exponential rise in early 2010s to requiring eventual bail out by a consortium of public sector lenders backed by central bank, the Reserve Bank of India (RBI).

The case allows for the discussion of several reasons leading to the fiasco at Yes Bank and how the contemporary banking sector regulations and economic conditions along with some questionable decisions of management played a role in making one of India's largest private sector banks go bust. The case discusses the evolution of Indian banking industry along with Indian economy and how the global recession of 2008-09 along with legacy of weak banking regulations paved the way for piles of non-performing assets (NPAs) and subsequent remedies put in place by the RBI and the Government of India. It also highlights the need for putting in place appropriate corporate governance regulations along with appropriate banking regulations to disincentivize subjective decision making while giving out loans, thus preventing such cases from happening in future.

Learning Objectives:

1. Analyze the root cause of recent failures and problems faced by Indian banking industry
2. Review the causes behind failure of one of the India’s biggest private sector bank – Yes Bank going from rising star to bust in matter of a decade and role played by the contemporary regulations and management decisions
3. Come up with future strategies and remedies in corporate governance and banking regulations to prevent similar problems from occurring in future

  • Pub Date:
    29 Jan 2022
  • Source:
    ICRC
  • Discipline:
    Strategic Management,Financial Management,Accounting / Banking & Financial Services
  • Product#:
    1681
  • Keywords:
    Yes bank, Rana Kapoor, non performing assets (NPA),RBI, Asset Quality Review ( AQR), ROA, Global financial crisis, Asset Reconstruction Company (ARC), Strategic Debt Restructure (SDR),bank corruption , prompt corrective action, insolvency and bankruptcy, ( IBC), corporate governance, Public Sector Asset Rehabilitation Agency (PARA) , banking scam.
  • Length:
    Pdf : 17 page(s) ,

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