YES Bank is in crisis mode

9 Mar 2020

YES Bank is in crisis mode

YES Bank is in crisis modeYES Bank finds itself in deep crisis and its founder, Rana Kapoor has been arrested.

What has exactly happened at the bank?

In the past 5 years, YES Bank went on a loaning spree. It gave out loans easily to people who asked for one, without confirming whether they'll be able to pay it back or not.
 	They continued lending money, even when the previous loans were not getting returned. As a result, these 'bad loans' started increasing in number.
 	They also gave out more loans than the other banks.
 	While their bad loans were piling up, they didn't make enough provisions in their profit to cover up the bad loans.
 	Every bank expects to have some loan defaulters who'll not be able to pay back their loans. Banks try to cover this loss with some of their profits.
 	The shareholders could sense trouble within the bank. So, for the past 1 year, the bank's shares at the share market have been falling.
 	As a result, people started withdrawing their money from Yes bank in large amounts.
 	This situation of more money going out than coming in, severely deteriorated the bank's financial position.

The government of India temporarily suspended all banking activity at YES Bank, while it took stock of the situation. All withdrawals were capped at ₹50,000.

This put a lot of people in trouble, especially those who were travelling or staying abroad and were depending on their YES Bank cards to make payments.

However, people are able to make transactions now.

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YES Bank finds itself in deep crisis and its founder, Rana Kapoor has been arrested. What has exactly happened at the bank? In the past […]

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