Life Ko Banao Rich. It wasn’t a phoenix, but observers could be forgiven for thinking so, given how the lender had risen from the ashes of its earlier mismanagement. This rebranding followed almost two years of discussions by the board of Yes Bank, now under the aegis of State Bank of India (SBI).
Those discussions centred around whether the lender needed new branding or a new name to win back the trust of customers after the Reserve Bank of India (RBI) had to step in to rescue it in March 2020. The unveiling of the new brand also coincided with the end of a three-year lock-in period for SBI and other financial institutions, which had become major shareholders in Yes Bank under the RBI’s reconstruction scheme. Under that scheme, SBI picked up a 49% stake in the restructured capital of the bank.
Together with SBI, domestic investors Housing Development Finance Corp., ICICI Bank, Kotak Mahindra Bank, Bandhan Bank, Federal Bank and IDFC First Bank invested ₹10,000 crore in the beleaguered lender, with 75% of their holdings locked for three years. Despite this dream team stepping in to oversee Yes Bank, the latter’s customers, clients and people at large had serious doubts about its financial viability. At that time, the new-generation private lender’s gross bad loans had soared to 16.8%, way higher than the 5.5% average of other private banks and the 8.2% average of the overall industry, as per RBI data.
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