Yes Bank Crisis , Explain by Touch To Make

Hey Friends, Due to the banking crisis in our country, The Yes Bank has collapsed ofter the PMC Bank. why did this happen? What affects the country’s economy? 

How can it be revived?

Come let us know the entire story in this blog article.

The first thing that you need to understand is that in comparison with the PMC BANK.

The crisis of the YES BANK is for bigger.

What is a PMC BANK 

PMC BANK is a cooperative bank. the reputation of cooperative banks is not that high not only is YES BANK.  YES, Bank is the fourth largest private bank of India.

There are a lot of companies that depend on huge private Banks.

for examples:-

in the case of YES BANK, there were at least 20 such companies which had YES BANK as the sole Banking part new for UPI Transaction.


In fact, 35% of UPI Transactions in the entire country happened through the YES BANK.

Deferent of PMC BANK and YES BANK 

                         PMC BANK                         YES BANK 
Moreover, the Money Deposited In this Bank.
  • PMC BANK had 11,000 crores worth of deposit. 
  • YES BANK had 2 lakh crores worth of deposits.
Employees in this bank 
  • PMC BANK had around 800 Employees 
  • YES BANK has 18,000 Employees

So, if a Bank fails, not only will this affect its depositors, not only will it affect these companies, but a lot more people will be indirectly affected.if their companies and services are tied up with this bank.


Our Stary commences in 2004 when Rana Kapoor And Ashok Kapoor co-jointly set up YES BANK Company. 2008 sees the unfortunate death of Ashok Kapoor in the Attacks of 26/11. after which it is a legal battle between Ashok Kapoor’s wife and Rana Kapoor as to who would control the Appointment of the board of Directors. but this is not the important thing at the start. the important thing is that offer 2008, it has been alleged that Rana Kapoor, who had been running the YES BANK has behavior entailed aggressively giving loans to high-interest rates and he was giving loans to people who had very low chances of repaying a very high Risked game.

UBS is a global financial services company. it pointed growth of YES BANK is happening because they have been giving loans to stressed companies. stressed companies refer to those companies that have a high Risk of mon repayment of loans. so by now, you may have understood that the major reason behind the crises of the YES BANK is the same bed loans and NPAs.

what is NPAs

  • loans are given to people and companies that cannot repay them back and these loans become bad loans/NPAs.
  • The meaning of NPAs is nonperforming assets. if the repayment of any one’s loans is delayed by 90 days or more, then it becomes an NPAs.

The NPAs of the YES BANK kept rising gradually and in 2017, the tow Reserve Bank of India noticed this too and they started monitoring the yes bank more strictly.  infect not only did the Reserve Bank of India notice the rise of NPAs but was concealing its real NPAs. That is it has even more NPAs than it admits. Thy ( Reserve Bank of India ) sow a difference of 3,000 crores between the actual figures and the fack figures stated by them. in September 2018, the RBI Ordered that Rana Kapoor would have to vacate the chair of the CEO. if YES BANK is to be saved.

Rana Kapoor crashed to be the CEO of YES BANK offer January 2019.  In November 2019, a chairman and two independent directors of the Bank resigned all along with this, the ratings of the Bank Continued to fall down steadily. A rating firm-CARE rating Firm Accorded a very bad rating to Yes Bank another reputed ratings firm, moody’s degraded the outlook of YES Bank from stable to negative. in March 2019 Navneet Gill becomes the new CEO of the bank but the problems had grown. so much that the yes Bank posted its first-ever quarterly loss in April 2019 after which their stock fell by 30% the next day their NPAs Ratio reached 8 %. I will talk about the ratio later in the blog.

Rana Kapoor sold all share

In November 2019, Rana Kapoor sold away almost all his shares of the YES BANK. All Share the total value was 142 crores.

This is despite the fact that last year he had tweeted in September 2018 and said diamonds are invaluable to me. that is he considered the shares of YES BANK as valuables as diamonds and he had written in his tweet that he would pass on these shares to his three daughters and their children and I world write in my will and instruct them to never sell their shares.

That while he was promising to never sell the shares because they well so valuable he should them one year later This point until the event the people who follow the news should have understood that the condition of YES BANK is going to deteriorate when Rana Kapoor almost all of his shares.

After 5th March 2020 RBI inter this Matter 

YOU Kouw the story ofter this ‘ on 5th March 2020, the RBI took up the entire Matter into its own hands, declared a Moratorium and placed a restriction that all those who have deposited their money in this bonk cannot withdraw more than 50,000 rupees per month except in emergency cases.

After this, the Stock of this Bank fill and so did the Sensex then news comes around that SBI might by this Bank than the stock of SBI fell too and on 8th March 2020 arrested RANA KAPOOR under allegations of finding and Money Laundering




How a bank works is very interesting all the money that is deposited by you in a bank all the depositors in a bank is no collected and kept by the bank at extend loans to other people this is where the bank learns its profit from. so any point of time, if all the depositors of a bank want to withdraw their money them the bank would not have that amount of money because it has used up that money to extend loans to other people.

in fact, the requirement of RBI is that it should be 4 % that money so that people can withdraw 4 % of total deposited money this ratio is called the cash reserve ratio and the requirement of RBI is that they have to maintain it @4% or more there is nothing wrong in this.

All the banks do the same but what generally happens is that whenever a bank extends loans to someone, they get the repayment of the loan, so overall there is a supply of money but this is not the same in the case of YES BANK. it is given out loans and the money disappeared.  so if everyone this to withdraw money form YES BANK from YES BANK, then there wouldn’t be enough money.

furthermore, when a bank is in crisis, then often the people want to ‘withdraw their money in panic. this is called a bank run.

in fact, order to avoid this the RBI puts a restriction that not more than a certain amount of money can be withdrawn at a time because if everyone goes to withdraws this money, there would not be enough of it and it would lead to a bank run but it also has a reverse psychological effect, that if RBI has declared a restrictions than the people get convinced that something fishing is happening that is why the RBI is doing this and this is why it is even more important to withdraw money.

So eventually this would also lead to a bank run. so it becomes very difficult to decide from the perspective of the RBI On whether they should place this restriction or not.



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