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Yes Bank loses more money in 3 months than PNB did in Nirav Modi's scam

Manoj Sharma     March 15, 2020

Crisis-hit YES Bank, which declared its third-quarter results on Saturday, made way more losses in just three months than Nirav Modi's Rs 13,700 crore PNB fraud that shook the entire banking industry in early 2018.

In its delayed financial results for the December quarter, announced on Saturday, YES Bank reported net loss worth Rs 18,564 crore, an exponential fall from its year-ago (Q3 of FY19) profit of Rs 1,001 crore.

Also Read: YES Bank Q3 net loss spikes to Rs 18,564 cr, its worst ever

YES Bank's losses are significantly higher than the burden of the diamantaire's scam on the Punjab National Bank.

Perpetrated by Nirav Modi, who's now lodged in a UK jail, the PNB scam was one of the biggest banking fraud in India's history. Nirav Modi had allegedly acquired fraudulent Letters of Undertaking from one of PNB's Mumbai branches to secure overseas credit from other Indian lenders.

Even though there's no confirmed case of scam related to Yes Bank that can be cited as the reason for the bank's poor show, the bank's founder Rana Kapoor is facing money laundering charges.

Enforcement Directorate (ED) has alleged money laundering amounting to Rs 4,300 crore against Rana Kapoor. ED has also claimed thats Rs 20,000 crore became NPAs under his watch. Kapoor has denied the allegations.

Yes Bank's financial crisis has largely been attributed to growing NPAs and poor management.

As per YES Bank's financial results, YES Bank's gross NPAs have pole-vaulted to 18.87 per cent -- the highest in the private banking space. Its gross NPAs stood at Rs 40,709.2 crore in Q3 up from Rs 5,158.6 crore at Q3 FY19. The net NPAs stood at Rs 11,114.72 in Q3, up from Rs 2,876.3 crore in Q3 FY19.

With the government firm on reviving the cash-strapped bank, various investor banks led by State Bank of India has been roped in to pump in liquidity into the lender. SBI will infuse Rs 7,250 crore, while other lenders including ICICI Bank, Kotak Mahindra Bank and Axis Bank will make investments worth Rs 3,100 crore.

The moratorium placed on the bank by the RBI will be lifted at 6 PM on March 18 (Wednesday next week). As part of the plan, the new management will take over, with SBI's former chief financial officer Prashant Kumar as its new Chief Executive Officer.

Also Read: YES Bank was on the verge of going belly up; here's what Q3 results reveal

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