As many of us knows that India’s fifth largest bank has been taken over by RBI and put it on moratorium and suspended its board and appoints a new ceo as well on friday rbi has announced a new reconstruction plan for Yes bank to protect the deposits of account holders but it certainly move its ownership to public sector bank or SBI.

Meanwhile, those who have accounts in the bank can withdraw a sum of Rs. 50,000 per month. and soon after its announced the various facilities net-banking,debit cards and credit cards as well the yes bank backed UPI payment app PHONEPE has been on outage working letting to create the chaos between people.

Now comes to the point what wrong happened with yes bank. well its not a new thing or not a suddenly change in yes bank but there has been some troubles at yes bank from a years now.YES bank is one of the fastest growing private banks in India.It begun its operations from 2004 and seen a quickly growth by having the transaction of over 3 lakh crore and due to that the share price of yes bank also touching the sky high(by trading at 1400 at one point)

But the turning point in the destiny of yes bank is when its one of the co-founder died giving the control of management to promoter Rana kapoor and then in order to expands its opeartion it gave loan to the firms which don’t get credit easily elsewhere but it was risky as well

And when the economy starts to shrunk the firms where yes bank had given loan to also fall leading to increasing to NPA TO 7.4% as of september 2019 but this is not only the thing which become the reason of YES BANK downfall but also there was many questions about the management control,conflicts of interest which led the RBI eventually refuse to permit an extension to MR. RANA KAPOOR as CEO due to “highly irregular credit management practices,serious deficiencies in corporate governance and a poor compliance culture”

Over the last few months, a new CEO and a board which also included one RBI appointee attempted to raise fresh capital from new investor by promising that bank would be get capital from major tech firm microsoft and by an unknown man who claimed to be canada’ richest person but when it become clear that no one were likely to save yes bank from downfall then RBI decided to jump and save before the major bank went burst and effecting the financial sector on large scale.

WHAT NEXT FOR YES BANK

On Friday, RBI put a reconstruction plan for yes bank and decided to give its ownership and management control to SBI buying the shares upto 49% shares at a price <10 and it means sbi is paying around 11,760 crore for the purchase existing shareholders will see thier shares diluted and end up with just 11% of the total shares while 40% would come from other financial institutions

On saturday some media firm had reported that may be LIC will also invest money into yes bank and the existed employess have their jobs for atleast 1 year except for key managerial jobs as they were dismissed by the new board.