Yes Bank must decide if it is Dish TV investor or a lender: Subhash Chandra

 

Breaking his silence over the Essel group’s dispute with Yes Bank, group patriarch Subhash Chandra said the bank should decide its role as shareholder of satellite TV broadcaster Dish TV India, or a lender, so that the group can accordingly take steps to settle the pending issues with the bank. In an interview, the founder of Zee group said the family's settlement offer is in Yes Bank’s court and the lender has not taken any steps yet to take the matter forward. “We are willing to give up control of Dish TV to Yes Bank, if the bank is interested in running the day to day operations of Dish TV as a shareholder. But if it’s a lender, then we are ready to negotiate to settle the account,” Chandra, 71, said.

After Yes Bank seized Chandra family's pledged shares following a default, the family’s stake fell to six per cent. The bank currently owns 25.63 per cent in Dish TV worth Rs 713 crore, as on Tuesday. The bank claims it has extended loans of Rs 5,270 crore to 10 different Essel Group entities between 2015 and 2018. According to Chandra, the promoter entities of Essel group owe Rs 4,200 crore but the bank has bunched several loans to other group companies, taking the total amount to Rs 5,270 crore. “We have already paid back 91 per cent of our lenders and we are ready to settle with Yes Bank by paying back more than what is the bank's stake in Dish TV,” Chandra said. “Our offer will be far better than other accounts where the bank has settled with a larger haircut.” A haircut is the amount the banks forego to settle a default account.

RBI bars YES Bank from coupon payment on Upper Tier II bonds

The Reserve Bank of India has controlled private area loan specialist YES Bank to pay premium (coupon) on the Tier II bonds as its capital sufficiency proportion was beneath administrative prerequisites.
The private loan specialist had moved toward banking part controller RBI looking for endorsement to pay enthusiasm due as on June 29, 2020 for Upper Tier II Bonds. These Unsecured Non-Convertible Upper Tier II bonds convey coupon of 10.25 percent.
Its general capital sufficiency proportion remained at 8.5 percent at end of March 2020 with Common Equity level I (CET I) of 6.3 percent. Its stock was exchanging 1.8 percent lower on BSE. The capital sufficiency proportion is beneath the administrative necessities.
The bank educated trades that RBI has communicated its failure to agree to bank's solicitation for installment of Interest due, since it doesn't meet the base capital necessities right now. Along these lines, the bank would be not able to pay Interest or coupon on the said Upper Tier II Bonds.
The Interest sum due and staying unpaid will be amassed and be paid later, subject to Bank agreeing to the specified administrative necessity, it included.
Bank has plans for raising value money to improve capital ampleness proportion, bolster development and make cushions for Covid-19. Its investors' have affirmed proposition for a total capital raise of up to Rs 15,000 crore.
This capital raising from business sectors would be additionally helped by wellsprings of natural capital (inside age). It intends to do as such by goals of Stressed resource goals and resource sell-down.

The conceded charge resource of Rs 6,118 crore deducted from total assets for processing CET 1, speaking to about 2.55 percent in CET 1 might accessible to the bank after some time, as indicated by Bank introduction.

Private lenders may lose deposits to PSBs due to YES Bank bailout: Report

The YES Bank rescue has undermined confidence of depositors in private sector lenders and will lead to smaller entities losing deposits to state-run banks, a report by global ratings agency Moody's Investors Service said on Tuesday.
The research report comes at a time when many private sector lenders have reported a contraction of deposits in the March quarter when the YES Bank crisis happened. The RBI - which had to steer the over Rs 10,000 crore YES Bank bailout - has repeatedly assuaged such concerns, saying money in all the banks is safe.
"The YES Bank event undermines depositor confidence in private sector banks, whereas public trust in PSBs (public sector banks) will remain strong, underpinned by a perception of strong government protection for them," the rating agency said, news agency PTI reported..
"As a result, some private sector banks, particularly, small institutions could lose deposits to PSBs, which will weaken their funding profiles," it added.
Moody's said the YES Bank episode places the country's financial system on "alert" and the rescue in itself "exposes weaknesses in the process to support a failing private sector bank".
"This case highlights that authorities will only rescue a private sector bank after imposing a moratorium, which effectively constitutes a default as it prevents the bank from making timely payments to its depositors and creditors, Alka Anbarasu, vice president and senior credit officer, said.
Apart from peer private sector banks, the YES Bank event will also impact the non bank lenders, who have already been facing troubles since the collapse of infra lender IL&FS in 2018, it said.

The agency said the YES Bank rescue package - which saw a write-off of Rs 8,415 crore of investments in the additional tier-I bonds - will increase uncertainty among debt investors about the health of the overall financial system in India, which will in turn exacerbate funding stress at the NBFCs.

YES Bank plans to raise Rs 20,000 crore through certificate of deposits

Currrent Affairs
Sickly private loan specialist YES Bank will hit the market with authentication of stores (CDs), a currency advertise instrument, to raise up to Rs 20,000 crore from institutional players, for the most part banks.
This is the principal huge scope (present moment) raising money exertion by the bank subsequent to being rescued under a remaking plan.
Rating office CRISIL has allocated 'A2' rating to the Rs 20,000 - crore CDs program of YES Bank.
The instruments conveying this rating are considered to have solid level of wellbeing in regards to opportune installment of money related commitments. Such instruments convey low credit chance, CRISIL said in an announcement.
The rating factors in the desire for proceeded with uncommon foundational support from key partners, alongside sizeable responsibility for Bank of India (SBI).
Truly Bank saw a consistent surge of stores in the previous scarcely any quarters given the difficulties looked by it and the antagonistic news reports concerning the bank.

Between December 31, 2019, and March 5, 2020, the store base contracted by around Rs 28,000 crore. Since March 31, 2018, the store base has declined by over Rs 63,000 crore. All things considered, the bank included contributors even in late quarters….Read More

All banking services to resume from evening; ATMs have cash: YES Bank

International News
Amazon.com Inc will just get imperative supplies at its US and UK and other European stockrooms until April 5, its most recent move to let loose stock space for clinical and family unit merchandise popular because of the coronavirus flare-up.
The change doesn't imply that Amazon will quit selling insignificant things like telephone cases and toys for the present, just that items might be bound to come up short on stock in the following scarcely any weeks or dealers need to deliver the items legitimately to buyers themselves.
In a note sent to venders on Tuesday, Amazon said it is seeing expanding web based shopping request from purchasers. As its family unit staples and clinical supplies are coming up short on stock, it will organize certain classes so as to "rapidly get, restock, and transport these items to clients."
Amazon characterized a few classifications as basic items that can keep shipping, including infant items; wellbeing and family unit things; excellence and individual consideration; basic food item; modern and logical; and pet supplies. Books are incorporated also.
"We comprehend this is a change for our selling accomplices and value their understanding as we incidentally organize these items for clients," Amazon said in an announcement.

The organization said the new convention applies to both first-party merchants and outsider dealers. That proposes that the organization isn't securing its own items.…Read More

YES Bank resolution will be swift, 30 days is an outer limit: RBI governor

Finance news
Shielding the planning of YES Bank's ban, Reserve Bank of India (RBI) senator Shaktikanta Das on Friday guaranteed quick goals to the issues concerning the ambushed loan specialist.
"The goals will be done quickly, it will be done extremely quick. 30 days which we have given is as far as possible. You will see an exceptionally quick activity from RBI," told correspondents after ASSOCHAM's fifteenth yearly financial summit.
"The choice is taken at a bigger level, not at singular element level, the move is planned for guaranteeing wellbeing of money related framework," he included
On the planning of the activity on YES Bank, Das said there is consistently banter over RBI acting rashly or taking too long to even think about acting.
"A market-drove and bank-drove goals of the issue is constantly best. You need to offer time to the bank the board to make stride and endeavors. What's more, the bank took endeavors. At the point when we found that we can't pause and ought not stand by any more, we chose to intercede," Das included.
Truly Bank was on Thursday set under a ban, with the RBI topping store withdrawals at Rs 50,000 for each record for a month and supplanting its board. The bank won't have the option to give or reestablish any credit or advance, make any speculation, acquire any obligation or consent to dispense any installment.
The RBI senator likewise said that the effect of Covid-19 on India will be restricted, yet advised that specific parts which rely upon China will be affected because of the plague and the mitigatory advances are being taken

...Read More

Yes Bank put under moratorium, withdrawals capped at Rs 50,000

Finance news
Private loan specialist Yes Bank was set under ban on Thursday, with the focal topping contributor withdrawals at Rs 50,000 for every record for a month and supplanting the board with prompt impact.
The Reserve Bank of India (RBI) took the choice in discussion with the administration to ensure contributors' advantage, revealed news office PTI.
"The Reserve Bank put forth all attempts to encourage such a procedure and gave sufficient chance to the bank's administration to draw up a believable recovery plan, which didn't appear. Meanwhile, the bank was confronting customary surge of liquidity," said a public statement by the national bank.
The RBI evacuated Yes Bank's board and named Prashant Kumar, a previous CFO of the State Bank of India (SBI), as chairman.
Truly Bank has been thinking about mounting awful credits. Media reports said before on Thursday SBI alongside some other money related organizations would rescue Yes Bank, with the administration giving the approval.

The arrangement would toss a help to Yes Bank which has been battling to raise capital since the center of a year ago, as it has confronted a flood in awful advances because of the country's shadow banking emergency. Moody's Investors Service cut the bank's FICO assessments in December and in January said its "independent reasonability is getting progressively tested by its gradualness in raising new capital."...Read More

RBI supersedes board of troubled YES Bank, sets Rs 50,000 withdrawal limit

Finance news
The Reserve Bank of India (RBI) on Thursday supplanted the leading body of pained private division loan specialist YES Bank and forced a 30-day ban on it "without a solid recovery plan" in the midst of a "genuine disintegration" in its money related wellbeing.
Previous State Bank of India CFO Prashant Kumar has been named director of YES Bank, and every contributor will have the option to pull back just up to Rs 50,000 altogether till the ban is set up, the RBI said in two authority proclamations gave on Thursday evening. Be that as it may, in extraordinary conditions, for example, a health related crisis or marriage, contributors can pull back up to Rs 5 lakh or the sum lying in account, whichever is less.
This is the first occasion when that a bank of this size will be put under a ban by the RBI. During the ban, which became effective from 6 pm on Thursday, YES Bank won't be permitted to concede or reestablish any advances, and "cause any obligation", with the exception of installment towards representatives' pay rates, lease, charges and legitimate costs, among others.
The national bank said the choice was taken in the open premium and in light of a legitimate concern for the bank's contributors, and that it was left with "no other option". "It (the RBI) had no other option yet to apply to the focal government for forcing a ban under area 45 of the Banking Regulation Act, 1949. As needs be, the focal government has forced ban successful from today," the RBI said in an announcement.
outline

The RBI said the monetary situation of YES Bank had experienced a consistent decrease "to a great extent because of powerlessness of the bank to raise cash-flow to address potential credit misfortunes and resultant minimizations...Read More

Govt approves plan for SBI-led consortium to buy stake in YES Bank: Reports

Current Affairs
The legislature has affirmed an arrangement for State Bank of India to lead a consortium that will purchase stake in YES Bank, individuals up to date have told Bloomberg. SBI has likewise been approved to pick different individuals from the consortium.
Indeed Bank has battled to raise capital it urgently needs to remain above administrative prerequisites as it fights significant levels of terrible credits because of its introduction to upset divisions. The loan specialist has been attempting to bring $2 billion up in new capital for two quarters. In January, the bank said it had dismissed a $1.2 billion venture offer from Canadian financial specialist Erwin Singh Braich and Hong Kong-based SPGP Holdings - an idea about which numerous examiners had communicated question.
Truly Bank said in February that it will defer its December-quarter results by in any event a month. Prior in February, the bank downsized its gathering pledges plan considerably to Rs 10,000 crore, from about to $2 billion endorsed by the board in November, as it proceeded with its battle to get financial specialists. It would collect the cash, in at least one tranches, through Qualified Institutions Placement, Global Depository Receipts, American Depository Receipts, Foreign Currency Convertible Bonds, or some other strategies on a private situation premise.
In January, the rating office India Ratings and Research (Ind-Ra) kept up YES Bank's long haul backer rating of 'IND An' on rating watch negative (RWN) and pulled back its momentary guarantor rating of 'IND A1'.

How emergency at YES Bank unfurled: The emergency at YES Bank began path in 2018 when the Reserve Bank of India in September 2019 cut off the establishing advertiser Rana Kapoor's new three-year term as CEO of the bank till January 31, 2019. Truly Bank's offers failed 30 percent the following day and proceeded with the descending winding...READ MORE

Falling deposits are the latest problem for Yes Bank after bad loans

Current Affairs
At the point when a previous YES Bank official began selling his stake in September, the loan specialist's top chiefs looked for any sign that the subsequent drop in share cost would trigger a hurry to pull back stores.
The stock deals came as clients of a local moneylender — Punjab and Maharashtra Co-employable Bank — were arranging outside its branches to pull back their cash following a supposed administration misrepresentation. Uncontrolled theory online about more extensive disease constrained the national bank to give uncommon proclamations guaranteeing the general population of the security of the money related framework. Indeed Bank's loss of mother and-pop stores in September was reasonable at last, however it highlighted a hazard for the moneylender whose peers HDFC Bank and ICICI Bank drew more reserve funds from clients during that period. India's fourth-biggest private bank has had a turbulent 2019 with another CEO incapable to raise the capital expected to support proportions that stand simply over an administrative least and control expert inquiries regarding its steadiness.
"It is currently an endless loop where an absence of capital is expanding worries on the bank's awful advances, making vulnerability among speculators and investors, which is adding to the withdrawal of minimal effort and retail term stores," said Ravikant Anand Bhat, an expert at IndiaNivesh Securities.

The moneylender's offer cost failed 74 percent a year ago as soured obligation mounted given its presentation to shadow banks ensnared in a drawn out smash in the nearby credit advertise. The dive has proceeded with this year, with shares dropping another 21 percent even as a benchmark file stayed minimal changed. The bank is because of report results for the December quarter, which will show whether stores dissolved further over the most recent three months of 2019....READ MORE

YES Bank picks IDFC Securities, Cantor Fitzgerald, Ambit to raise $2 bn

Current Affairs
Truly Bank has picked Cantor Fitzgerald, IDFC Securities and Ambit to enable the moneylender to raise as much as $2 billion for supporting capital cushions, individuals with information on the issue said.
The bank, faltering under the heaviness of soured credits, has been tormented by stresses over its advantage quality and vulnerability about endeavors to raise new capital. It's attempting to support a center value capital proportion that is scarcely over an administrative least of 8 percent.
The moneylender's offers flooded the most since November 27 on Wednesday as speculators were urged by the transition to pick investors, while its 2023 dollar security picked up the most since January 15. Indeed Bank, drove by Chief Executive Officer Ravneet Gill, has lost more than 80 percent of its reasonable worth in the previous year on worries about its capacity to raise reserves.
"As validity and slant get dissolved, time is running out for the bank to raise capital," as per Bloomberg Intelligence investigator Diksha Gera.
"With the financiers for gathering pledges set up Yes Bank needs to move rapidly to evade alarm among credit speculators, which could cause undesirable liquidity pressure." Cantor Fitzgerald is driven by Anshu Jain, the previous co-CEO of Deutsche Bank AG until 2015, while Gill headed the German bank's Indian activities before he joined Yes Bank a year ago. The Economic Times revealed the arrangement of the banks prior.

A representative for Yes Bank and representative for Ambit declined to remark about the raising support plans. A delegate for IDFC Securities and representative for Cantor didn't quickly react to messages looking for input....READ MORE

A bank's race against crisis has served a warning to Indian banking

International News
India’s fragile financial system is swinging between despair and hope. Two separate incidents — both featuring the lender YES Bank Ltd — recently underscored the drag of past underwriting follies as well as the lift from a digital reset. It will take time, but good things will come to Indian banking as a result of the present crisis.
Start with the sudden default by financier Altico Capital India Ltd. on a 199.7-million-rupee ($2.8-million) interest payment to Abu Dhabi-based Mashreqbank PSC. Clearwater Capital Partners-backed Altico, which borrows money from banks and mutual funds to make loans to property developers, called the situation a “liquidity crisis.” And that made YES Bank investors gloomy.
Based on January data, the midsize Indian bank had a 4.5-billion-rupee exposure to Altico, the third-highest after Mashreq and HDFC Bank Ltd.
While HDFC Bank, the country’s most valuable lender, has the capital — and current profit — to take the occasional credit hit, YES’s capital cushion is already frayed by dodgy loans to beleaguered shadow banks and troubled tycoons. Both these borrower groups have found it hard to refinance debt since the collapse last year of IL&FS Group, a large Indian infrastructure financier and operator. Altico’s unraveling shows that an end to credit woes is not yet in sight.

 At more than $200 billion, India’s world-beating pile of bad loans is bigger than Italy’s. State-run Indian banks are carrying the bulk of the burden, but at least they’re getting dollops of taxpayers’ money and being merged into fewer banking groups. A private-sector lender like YES doesn’t have a formal public backstop. If it can’t fend for itself, the central bank could step in and force an arranged match with a better-run bank. The terms won’t be favorable to Yes shareholders...Read More

Ravneet Gill to be YES Bank boss after Rana Kapoor's tenure ends on Jan 31

Companies News:

Ravneet Gill, a career banker with Deutsche Bank, will succeed Rana Kapoor as the managing director and chief of YES Bank. Kapoor’s tenure ends on January 31.Gill, currently Chief Executive of Deutsche Bank’s business operations in India, is expected to take charge latest by March 1, YES Bank said in a statement.

Reserve Bank of India (RBI) has approved the appointment of 57-year-old Ravneet Gill for a three-year term.The YES Bank board will meet on January 29 to finalise the delegation of powers for the transition management in the interim period till Gill assumes office. Ravneet Gill to be YES Bank boss after Rana Kapoor's tenure ends on Jan 31 Kapoor's role in the bank as well as those in the bank's subsidiaries will also be decided in the meeting.

Ravneet Gill to be YES Bank boss after Rana Kapoor's tenure ends on Jan 31 Meanwhile, the board has appointed Maheswar Sahu, former Gujarat cadre IAS officer, and Anil Jaggia, former banker with HDFC Bank, as additional directors (independent). It will also recommended the RBI appointments of Ashish Agarwal as the executive director.


The bank, in its submission to the RBI on January 10, had stated that Gill was their most-preferred candidate for the top post. The appointment will be subject to shareholders’ nod at the bank’s Annual General Meeting in June...Read More