How Yes Bank Rose, Fell, and Fought Back: A Story of Ambition, Crisis, and Redemption

In 2003, three ambitious Mumbai bankers—Rana Kapoor, Ashok Kapur, and Harkirat Singh—decided to do something audacious. They would build a new kind of bank in India. A bank that would challenge the established giants with vision and speed. Their dream had a bold tagline: "Building the Finest Quality Large Bank of the World in India."

They called it Yes Bank.

The Beginning: Three Dreamers and a Vision

The trio wasn't starting from scratch. They had already proven their mettle by co-founding Rabo India Finance in partnership with Rabobank of the Netherlands in 1997-98. When they decided to pivot to full-fledged banking, they sold their stakes in Rabo India Finance and used the proceeds to establish Yes Bank in early 2003.

But partnerships, especially ambitious ones, can be fragile. Harkirat Singh departed in April 2003, citing concerns over Rabobank's influence in appointing leadership. This left Rana Kapoor and Ashok Kapur to drive the vision forward.

In May 2004, the Reserve Bank of India granted Yes Bank its banking license. The initial shareholding structure told the story of a carefully assembled coalition: Rana Kapoor and Ashok Kapur each held 26% stakes, Rabobank owned 20%, newly-appointed directors held 3%, and private equity firms controlled the remaining 25%.

The bank opened its first branch in August 2004. Ashok Kapur served as Chairman while Rana Kapoor took charge as Managing Director and CEO, handling day-to-day operations. Their contrasting styles—Kapur's conservative banking approach versus Kapoor's aggressive risk-taking—created a dynamic tension that initially served the bank well.

The Rocket Ship Years

Yes Bank didn't just enter the market; it announced its arrival with fanfare. In June 2005, barely a year after getting its license, the bank listed on Indian stock exchanges through an IPO priced at Rs 35 per share with a face value of Rs 10.

What followed was a period of extraordinary growth. Yes Bank positioned itself as the "Professionals' Bank of India," focusing heavily on corporate banking and building relationships with major business houses. The bank's aggressive growth strategy paid off spectacularly. By 1999, just as Yes Bank was taking shape in the founders' minds, ICICI became the first Indian company to list on the New York Stock Exchange. This milestone inspired Indian private banks to think globally.

The bank won accolades that validated its ambitions: Best Bank for SMEs in India from Asiamoney magazine, Global Winner for Payments from The Banker, Bank of the Year India Award in 2015 and 2017, and recognition as the Asian Banker Strongest Bank in India multiple times between 2012 and 2016.

The Tragedy That Changed Everything

November 26, 2008 changed Yes Bank's trajectory forever. During the horrific 26/11 terrorist attacks in Mumbai, co-founder and Chairman Ashok Kapur was killed while dining at the Trident Hotel.

His death left Rana Kapoor in complete control. What followed became a source of deep controversy. Within a few years, Kapoor allegedly attempted to erase Kapur's role from the bank's history. In December 2012, when Kapoor published a brief history of Yes Bank, there was shockingly no mention of the co-founder who had helped build it.

This sparked a bitter feud with Madhu Kapur, Ashok's widow, who wanted her daughter Shagun Gogia to represent the family's shareholding on the board. Multiple attempts between 2009 and 2013 were rejected. The family politics that should have remained private began casting shadows over the institution.

The Cracks Begin to Show

While the feud simmered, Yes Bank continued its aggressive lending. But the Reserve Bank of India's asset quality reviews in 2017 and 2018 exposed uncomfortable truths. The bank had significant exposure to stressed sectors and companies unable to repay loans. Non-performing assets were mounting.

By September 2018, the RBI ordered Kapoor to step down from his CEO position by January 2019. His replacement, Ravneet Gill, inherited a bank with serious problems. Despite attempts to raise capital, the financial position deteriorated rapidly. In September 2016, Yes Bank had scrapped a proposed $1 billion share sale due to market conditions. By early 2020, it became clear that time was running out.

The Crisis That Shook India

On March 5, 2020, the financial world woke up to shocking news. The Reserve Bank of India had placed Yes Bank under a 30-day moratorium, superseding its board. Customers could withdraw only Rs 50,000 from their accounts. For a bank with deposits exceeding Rs 2 lakh crore, this was catastrophic.

The RBI's statement was damning. Yes Bank had failed to raise new funding to cover non-performing assets, made inaccurate statements about its ability to receive new funding, and underreported NPAs. The bank's gross NPA ratio had ballooned from around 1% in earlier years to over 16%.

ICRA immediately downgraded Yes Bank's Rs 526 billion in core bonds to "D" rating—default territory. Moody's slashed ratings to Caa3. The bank's share price, which had traded at Rs 404 in August 2018, collapsed to a record low of Rs 5.65.

The moratorium disrupted e-commerce services across India. UPI payments failed. Panic spread. For three tense days, India held its breath wondering if a major bank would collapse.

The Rescue: India's First Bank-Led Reconstruction

On March 13, 2020, the Union Cabinet approved an unprecedented reconstruction scheme. State Bank of India would inject capital and take a 49% stake, leading a consortium that included ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, and prominent investors like Rakesh Jhunjhunwala, Radhakishan Damani, and Azim Premji Trust.

Seven investors infused Rs 120 billion into Yes Bank. Prashant Kumar, former CFO of State Bank of India, was appointed as the new MD and CEO. Sunil Mehta, former non-executive chairman of Punjab National Bank, became the non-executive chairman.

The moratorium ended on March 18, 2020—ahead of schedule. Banking operations resumed, though under strict oversight. The RBI extended a Rs 600 billion credit line; Yes Bank borrowed Rs 500 billion and repaid it by September. RBI Governor Shaktikanta Das reassured the nation: "Never in the history of banks in India have depositors lost money."

On March 8, 2020, the Enforcement Directorate arrested Rana Kapoor, charging him with money laundering and fraud exceeding $100 million. The CBI accused him and his family members of receiving Rs 43 billion in kickbacks for sanctioning huge loans that turned into NPAs. Multiple properties in Delhi and Mumbai were attached. His daughters were stopped from flying abroad.

In April 2024, after four years in custody, Rana Kapoor was granted bail. But his legacy remained tarnished.

The Long Road Back

The new management under Prashant Kumar worked methodically to stabilize the ship. In July 2020, Yes Bank raised Rs 148.7 billion through a follow-on public offering, pricing shares at Rs 12-13—a steep discount but necessary for survival.

The focus shifted to cleaning up the balance sheet. The bank sold stressed loan pools worth Rs 480 billion to JC Flowers Asset Reconstruction Company. It systematically worked through NPAs, recovering over Rs 5,000 crore of bad loans over four years.

The results started showing. The bank's gross NPA ratio dropped from 16-17% in 2020 to 1.6% by March 2025. Net NPA fell to just 0.3%. The capital adequacy ratio improved to 15.6%. By Q2 of fiscal year 2025, Yes Bank achieved EBITDA profitability. In March 2022, it reported full-year profitability for the first time since the crisis.

Net profit for fiscal year 2025 increased by 90.4% year-on-year. Net interest margins improved to 2.7%. The bank's deposits crossed Rs 2.76 trillion by June 2025, with total advances reaching Rs 2.41 trillion.

A New Chapter

Today, Yes Bank operates with 1,198 branches and 1,287 ATMs across 300 districts in India. In 2022, private equity groups purchased a 10% equity stake, reducing SBI's holding to 26%. In 2025, Sumitomo Mitsui Banking Corporation increased its stake to 24.22%, signaling international confidence in the bank's turnaround.

The bank continues to serve retail, MSME, and corporate customers, earning income from traditional banking as well as fees, cards, foreign exchange, and treasury operations. Its digital platforms remain competitive, offering comprehensive mobile and internet banking services.

The Lessons

Yes Bank's story is a cautionary tale about the dangers of concentrated power, weak governance, and aggressive lending without adequate risk management. It's a reminder that in banking, trust is everything—and once lost, takes years to rebuild.

But it's also a story of redemption. Of regulators willing to step in decisively to protect depositors. Of competing banks setting aside rivalry to save a peer. Of professional managers who took over a broken institution and painstakingly rebuilt it.

From the vision of "Building the Finest Quality Large Bank" to near-collapse to recovery, Yes Bank's journey mirrors the highs and lows of India's private banking sector. The bank that once said "Yes" to everything learned the hard way that sustainable success comes not from aggressive growth, but from disciplined, ethical banking.

The story isn't over. Whether Yes Bank can fully reclaim its position among India's banking elite remains to be seen. But it survived—and in banking, survival against such odds is itself a victory worth acknowledging.