Exposing the Yes Bank crisis


India’s economy was booming in 2004, and “India Shining” seemed like a fitting slogan to capture thought. At that time, a non-bank finance company requested (and received) permission to operate as a private bank. Thus was born ‘Yes Bank’. Its rise was phenomenal and it quickly became the country’s fourth-largest private bank, with approvals approved to operate in Singapore, London and Dubai.

Senior journalist and author of Pavan C. Lall’s book, Yes Man: The Untold Story of Rana Kapoor, is the story of Rana Kapoor and her Icarus-like theft that ultimately led to the Yes Bank crisis. From his early days as a junior employee at the Bank of America to running a billion dollar bank, Kapoor’s rise and fall is a case study of ambition, greed, and deception. We spoke to the author. Interview excerpts

What prompted you to explore this subject?

The business community in India has seen a wave of corporate implosion and allegations of wrongdoing in recent years. PNB, IL&FS, PMC Bank, ICICI, DHFL, COX & Kings, and many more – I think it’s inevitable for any media professional to miss the writing on the wall. Such events not only erode and eat away at the very fabric of our economy, but also dishonor our country and all those who honestly make a living in it. In India in particular, corporate fraud and white collar crime is a particularly dirty game, as it means getting rich at the expense of ordinary working class people and, in most cases, even the poorest. I decided to explore this topic with the goal of generating more attention to address these discrepancies.

In the book, you not only wrote about Rana Kapoor’s journey, but you also asked tough questions about the country’s banking system. Do you have any suggestions for improvement?

If it had not been for Raghuram Rajan’s “Asset Quality Review” reports, much might have remained hidden from the public. While this is a positive step, more is needed to report deviant behavior on the part of lenders, as well as to fully improve the compensation system for RBI and PSU Bank officials. If you look at the salaries of Indian company executives, it’s almost ten times that of its PSU counterparts. This needs to be corrected quickly. The difference can be 10% or 20%; it can’t be 90%.

What kind of research did you do to write your book? How long did it take you to finish it?

All kinds of research has been done there – primary, secondary and tertiary – talking to the sources, talking to all who know and sometimes even those who are unaware, in the hope of turning stones for clues about what was happening at. It wasn’t easy and the lockdown environment made it even more difficult at times. It took about six months from start to finish.

What are some memorable anecdotes that you encountered during your research?

“Rana is never wrong” is a phrase many of his former employees remember him as a mantra when managing his bank and growing the business. Of course he was terribly wrong, and it’s ironic and shows how power and money often lead to pride.

Another anecdote was lighter on how Rana had wanted to buy two Mercedes Benz cars and the sales rep had come to meet him just before he addressed a stakeholder town hall. Kapoor had his spokesperson while he went to meet the vendors and bargained hard for the cars. Meanwhile, an entire audience was listening as the Wi-Fi connection on the mouthpiece was on and the conversation relayed over the building’s speakers.

How did you become fascinated by banking and finance?

It is the second oldest profession, one might say, and its complexities engage a multitude of facets in any business community. Since the days of the Roman Emperors and Greeks, banking has involved power, politics, regulations and laws. It is a complex matter and the crimes involving the banking sector are even more complex. I found this aspect difficult and exciting to discover and research.

Besides writing, what else are you passionate about?

Reading, sport and travel, the last of which, of course, had to give up last year. Also, I am passionate about safer automobiles for India.

Please give a little insight into your background and future plans.

I am originally from Calcutta and grew up in Darjeeling, after which I attended college in Texas. I have been a professional journalist and author for over two decades and have worked in India and the United States on online shows, magazines, newspapers and journals. I intend to continue writing so that reality does not catch up with me.

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