At a time when Rana Kapoor, former MD and CEO of Yes Bank and his family are under investigation on charges of alleged money laundering and grant of suspicious loans extended by the Bank to various groups in the country, data sourced from top sources in the financial industry show that at least 44 companies, belonging to 10 large Indian business groups, accounted for bad loans of over Rs 34,000 crore of Yes Bank.
While at least nine companies of the Anil Ambani Group accounted for NPAs worth Rs 12,800 crore, at least 16 companies belonging to Subhash Chandra’s Essel Group made up Rs 8,400 crore worth of bad loans of Yes Bank.
Dewan Housing Finance Corporation and Belief Realtors Private Ltd of the DHFL Group took loans worth Rs 4,735 crore while Yes Bank had exposure of over Rs 2,500 crore to IL&FS that turned bad. Yes Bank is also learnt to have loaned Rs 1,100 crore to Jet Airways.
Among other groups that account for bad loans of Yes Bank are Kerkar Group whose two companies Cox & Kings and Go travels have taken loans of around Rs 1,000 crore; McLeod Russel of B M Khaitan Group (Rs 373 crore); two projects of Omkar Realtors and Developers (Rs 2,710 crore); Radius Developers (Rs 1,200 crore) and C G Power of Thapar Group (Rs 500 crore).
This list of companies clearly reflects the bank’s exposure to most stressed companies that operate in sectors including those relating to infrastructure, real estate and financial sector.
Last week, at a press briefing, Finance Minister Nirmala Sitharaman said that stressed corporate customers of the private sector lender from the pre-NDA government era led to the crisis at Yes Bank, and that prompted the Reserve Bank of India to place it under moratorium.
“I wouldn’t even mind taking their names as they are in public domain and I am not violating any customer’s privacy. Anil Ambani Group, Essel Group, DHFL, Infrastructure Leasing & Financial Services Ltd and Vodafone are some of those very stressed corporates to whom Yes Bank has been exposed. This is prior to 2014,” Sitharaman said.
Yes Bank delayed the announcement of the third-quarter results in view of its slow progress in getting an investor or fund infusion. In November 2019, the bank reported a net loss of Rs 600 crore for the three months to September, primarily owing to a one-time deferred-tax asset (DTA) adjustment of Rs 709 crore.
Its gross NPAs increased to Rs 17,134 crore in the quarter ended September from Rs 3,866 crore in the year-ago period. Net NPAs moved up to Rs 9,757 crore from Rs 2,019 crore in the same period. In percentage terms, the net NPAs jumped from 0.84 per cent in Q2 FY19 to 4.35 per cent in Q2 FY20.
The bank made provisions of Rs 1,336 crore for the quarter. The bank’s total outstanding advances stood at Rs 2.24 lakh crore in the quarter under review, down 6.3 per cent year-on-year.
The bank also saw a decline in total deposits by six per cent to Rs 2.09 lakh crore.
Last Friday, the RBI unveiled a reconstruction scheme, indicating the possibility of State Bank of India, India’s largest bank, acquiring a 49 per cent equity stake in the private sector lender.
Yes Bank’s troubles started early last year even as the RBI slapped curbs and limited withdrawals in Punjab and Maharashtra Co-operative Bank following reports that real estate developer HDIL group had defaulted 73 per cent of the lender’s total loan book. However, the RBI has since relaxed the caps on withdrawals from PMC.
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